TCR_Public/010518.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Friday, May 18, 2001, Vol. 5, No. 98

                             Headlines

AMERICAN HOMEPATIENT: Lenders Agree To Extend Credit Term
BOSTON CHICKEN: Houlihan Lokey Catches Plan Trustee's Attention
BRIGGS & STRATTON: S&P Lowers Ratings to BBB- From BBB+
BROADBAND OFFICE: Case Summary & 20 Largest Unsecured Creditors
CALYPTE BIOMEDICAL: Shares Face Delisting From Nasdaq

CASTLE DENTAL: Taps Haynes & Boone As Counsel In Restructuring
CASUAL MALE: Denies Bankruptcy Reports
CT HOLDINGS: Shares Knocked off Nasdaq, Now Trading On OTCBB
DERBY CYCLE: S&P Cuts Long-Term, Bank Loan Ratings to D From CCC
DOLPHIN TELECOM: Says It May Not Be Able To Pay Debts This Year

DOLPHIN TELECOM: Moody's Downgrades Notes' Rating To Ca
DYERSBURG CORPORATION: Downsizing Operations To Reduce Costs
EDISON INT'L: Board Decides To Eliminate Q2 Dividend Payments
FUTUREONE: Releases Second Quarter Results
GENESIS HEALTH: Seeks Court Nod On Swap Settlement With Citibank

GTC TELECOM: Needs More Funds To Continue As A Going Concern
HARNISCHFEGER: Resolves Claim Dispute with NatWest Bank
HUNGRY MINDS: Posts $8MM Loss & Confirms Plan to Sell Business
INTEGRATED HEALTH: Transfers Cheyenne Facility To Preferred Care
J.C. PENNEY: Fitch Lowers Notes' Rating To BB+ From BBB-

LA MANCHA: UAW Makes $9.75 Million Bid For Palm Springs Resort
LODGIAN INC.: Amends Senior Secured Loan Credit Facility
LOEWEN: Missouri Unit Seeks Authority To Sell Assets For $100K
LTV CORPORATION: Resolves Contract Dispute With Peoples Energy
MARINER: Court Allows Alice Frakes To File Late Proof of Claim

MARTIN INDUSTRIES: AmSouth Bank Agrees To Extend Credit Facility
MATTRESS DISCOUNTERS: S&P Junks Corporate & Senior Debt Ratings
NTEX INCORPORATED: Noteholders Endorse Plan of Arrangement
ORIUS CORPORATION: S&P Places Low-B Credit Ratings On Watch
PACIFIC GAS: Funding Energy Programs & Paying Pre-Petition Taxes

PILLOWTEX: Closing Some Operations in Kannapolis And Columbus
PSINET INC.: Tells SEC Form 10-Q Will Be Late
REGAL CINEMAS: Creditors Demand Payment For $1.8 Billion Debt
RITE AID: Expects To Close $3.0 Billion Refinancing Deal in Q2
TANDYCRAFTS: Files Chapter 11 Petition in Wilmington

TANDYCRAFTS: Case Summary & 20 Largest Unsecured Creditors
THERMADYNE HOLDINGS: Credit Ratings Fall To Junk Levels
TRI VALLEY: Completes Final Sale Of Assets
UNIFORET INC.: Gets 45-Day Extension To File Plan of Arrangement
US INTERACTIVE: Securities Kicked Off From Nasdaq

W.R. GRACE: Rejecting Six Burdensome Lease Agreements
WARNACO GROUP: Obtains Waiver of Certain Debt Covenants
WOMEN.COM: Says Capital Is Insufficient To Sustain Operations
WORLD KITCHEN: Posts $44.9 Million Net Loss For Q1 2001
ZAMIAS SERVICES: Files for Chapter 11 Protection in Pittsburgh

ZAMIAS SERVICES: Chapter 11 Case Summary
ZANY BRAINY: Wells Fargo Extends $115 Million DIP Financing

BOOK REVIEW: The Wreck of the Penn Central

                             *********

AMERICAN HOMEPATIENT: Lenders Agree To Extend Credit Term
---------------------------------------------------------
American HomePatient, Inc. (OTC:AHOM) reported its financial
results for the three months ended March 31, 2001. Earnings
before interest, taxes, depreciation and amortization (EBITDA)
for the quarter was $12.0 million, representing an increase of
$2.8 million over the same quarter of 2000. The Company's net
loss for the first quarter of 2001 was $(6.6) million compared
to $(8.6) million for the first quarter of 2000.

Revenue for the three months ended March 31, 2001 was $91.1
million, up from $87.9 million reported for the same three-month
period of 2000, representing an increase of $3.2 million. The
revenue increase over the prior-year quarter is the result of
internal growth of approximately 3% along with the consolidation
of several of the Company's joint ventures beginning in the
second quarter of 2000, offset by lost revenue associated with
the termination of a contract effective January 2001.

EBITDA margin for the first three months of 2001 was 13.2% of
net revenue compared to 10.5% for the first three months of
2000. Overall, operating expenses decreased in the current
three-month period compared to last year. This decrease is due
primarily to a significant improvement in bad debt expense. As a
percentage of revenue, bad debt expense in the first quarter of
2001 was 4.3% compared to 7.8% in the first quarter of 2000.
This improvement in bad debt expense is largely the result of
improved cash collections resulting from the redesign and
standardization of reimbursement processes and the consolidation
of certain billing locations into larger regional billing
centers.

The Company and its lender group also announced that they have
reached an agreement in principal to amend the Company's current
credit agreement. As previously reported, the Company is in
default under its credit facility as a result of breaching
several financial covenants and failing to make a principal
payment due March 15, 2001. The amended credit agreement is
expected to cure the current defaults, amend the principal
amortization schedule, and extend the term of the agreement to
December 31, 2002. The Company expects to finalize the amendment
on or about May 18, 2001.

American HomePatient is one of the nation's largest home health
care providers with over 300 centers in 38 states. Its product
and service offerings include respiratory services, infusion
therapy, parenteral and enteral nutrition, and medical equipment
for patients in their home. American HomePatient's common stock
is currently traded over-the-counter under the symbol AHOM.


BOSTON CHICKEN: Houlihan Lokey Catches Plan Trustee's Attention
---------------------------------------------------------------
Gerald K. Smith, in his capacity as the Trustee of the Boston
Chicken Plan Trust asks the U.S. Bankruptcy Court for the
District of Arizona for an order compelling Houlihan Lokey
Howard & Zulkin and its attorney of record, Richard A. Chesley,
Esq., at Jones, Day, Reavis & Pogue, to produce documents for
inspection and copying before the end of the month at the
offices of the Plan Trustee's law firm, Lewis and Roca. HLHZ
served as the financial advisor the the Official Committee of
Unsecured Creditors during Boston Chicken's failed chapter 11
reorganization proceeding. Presumably, Mr. Smith is gathering
evidence to challenge the millions of dollars in fees HLHZ has
sought payment of from the Boston Chicken Plan Trust set-up
under the Debtors' plan of liquidation. But, who knows what
might be up Mr. Smith's sleeve.

Specifically, Mr. Smith wants to get his hands on:

1. All work product, memoranda and/or any other documents
    evidencing, referring or relating to the "Advisory Services"
    performed by Houlihan Lokey for the Official Committee of
    Unsecured Creditors, including, but not limited to:

      (a) advising the Committee with respect to the Company's
          financial condition, business plans, forecasts and
          related projections;

      (b) reviewing industry valuation parameters;

      (c) reviewing various business plans promulgated by Boston
          Chicken;

      (d) investigating and providing the Committee with
          information and analysis regarding the Company's
          various operational restructuring initiatives;

      (e) creating and formulating of alternative restructuring
          scenarios, accompanied by preliminary valuation
          indications of both the Company and any securities to
          be issued as a part of restructuring;

      (f) discussing and negotiating with the Debtor's senior
          secured lenders and their advisors on potential
          alternative plans or reorganization;

      (g) analyzing the economic impact of assuming/rejecting
          various contracts;

      (h) advising the Committee in connection with a possible
          sale transaction involving the sale of the business or
          assets of the Debtor;

      (i) advising the Committee as to the financing alternatives
          in connection with various plans of reorganization;

      (j) attending numerous meetings, participating in
          conference calls, and having numerous discussions with
          the Debtor and its advisors, the Debtor's senior
          secured lenders and their advisors, and several other

      (k) providing the Committee with various industry,
          comparable company and competitor analyses;

      (l) engaging in discussions with parties interested in
          financing or acquiring the Company; and

      (m) performing such additional advice and assistance as the
          Committee requested from time to time.

2. All time records for all Houlihan Lokey personnel who
    performed any work for the Committee.

3. All work product, memoranda and/or any other documents
    evidencing, referring or relating to time spent by Houlihan
    Lokey personnel on work for the Committee.

4. Complete resumes of all Houlihan Lokey personnel who
    performed any work for the Committee. The resumes should
    include the number of years each individual has worked at
    Houlihan Lokey as well as a start date for each individual.

5. Copies of receipts for all expenses claimed by Houlihan
    Lokey.

6. All work product, memoranda and/or any other documents
    evidencing, referring or relating to the expenses claimed by
    Houlihan Lokey.


BRIGGS & STRATTON: S&P Lowers Ratings to BBB- From BBB+
-------------------------------------------------------
Standard & Poor's lowered its long-term corporate credit, senior
unsecured debt, and preliminary shelf ratings for Briggs &
Stratton Corp. to triple-'B'-minus from triple-'B'-plus, as well
as its short-term corporate credit and commercial paper ratings
to 'A-3' from 'A-2'. The single-'B'-minus corporate credit and
triple-'C' subordinated debt ratings for Generac Portable
Products Inc., and single-'B'-minus corporate credit and senior
debt ratings for Generac Portable Products LLC have been
withdrawn. All ratings for Briggs & Stratton and Generac have
been removed from CreditWatch, where they were placed on March
1, 2001 and April 27, 2001 (new Briggs & Stratton senior notes).
Standard & Poor's has also withdrawn its triple-'B'-plus rating
on Briggs & Stratton's $140 million 364-day credit line, which
has been canceled.

A complete list of ratings is available on RatingsDirect,
Standard & Poor's on-line credit research service, or by calling
the Standard & Poor's ratings desk at (1) 212-438-2400.

The outlook is negative.

About $449 million of total debt was outstanding at Briggs &
Stratton on April 1, 2001.

The downgrade follows Briggs & Stratton's May 15, 2001 closing
of its acquisition of Generac for $270 million, as well as an
earnout provision. The acquisition was largely debt-financed,
and the resulting large increase in leverage has weakened Briggs
& Stratton's historically strong credit measures. Generac has
become a guarantor of all existing and new debt at Briggs &
Stratton. Generac's credit facilities have been canceled
subsequent to the repayment of all of its outstanding debt at
closing by Briggs & Stratton.

Briggs & Stratton is the world's largest producer of air-cooled
gasoline engines used for mass-merchandised lawn and garden
power equipment. The company's market share is strong, with an
estimated 45%-50% share of the worldwide market for 3 horsepower
(hp)-25hp engines, and inclusion of its engines in excess of 50%
of all residential lawn mowers in the U.S. However, the
company's end markets are mature and competitive and the
business is highly seasonal. Generac is a leading manufacturer
of portable generators and pressure washers for use in
industrial and residential applications. The acquisition will
provide Briggs & Stratton with two new product lines, as well as
entry into the consumer-end product market in the power
department.

However, purchases of generators and power washers are somewhat
discretionary, and generator purchases are tied to severe
weather, which will add some volatility to Briggs & Stratton's
average business profile.

Although Generac gained market share in 2000, the company's
financial performance weakened because of inventory buildup at
its retail customers and lack of severe storm activity. Future
growth of the generator market is expected to come from further
household penetration.

Pro forma for the acquisition, Standard & Poor's estimates
Briggs & Stratton's fiscal year-end debt levels will grow to
about $550 million from about $160 million at fiscal year-end
July 2, 2000. As a result, leverage will increase significantly
with estimated pro forma total debt to capital of about 55% as
compared to 28% at July 2, 2000. Operating performance at Briggs
& Stratton had weakened in the first nine months of fiscal 2001
with a more than 40% decline in EBITDA versus the same prior
year period. This decline was due to a 7% decline in engine unit
sales resulting from reduced demand following a period of engine
shortages in 1998-1999, an unfavorable mix change to lower
margin, lower hp units, and the impact of a weak euro. The
combination of soft performance at both Briggs & Stratton and
Generac, in addition to the increased debt levels will
substantially weaken credit measures. Pro forma for the
acquisition, Standard & Poor's estimates EBITDA to interest will
decline to under 5 times (x), compared to coverage of 7.0x for
the last 12 months ended April 1, 2001, and 12.8x for fiscal
year-end 2000. Standard & Poor's will expect the company to
sustain EBITDA coverage in the 4.5x area in order to maintain
the new triple-'B'-minus rating. Some financial flexibility is
provided by the company's $250 million multi-currency credit
agreement.

                      Outlook: Negative

The outlook reflects Standard & Poor's uncertainty about
whether or not Briggs & Stratton will be able to maintain
credit measures appropriate for the revised rating.


BROADBAND OFFICE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Broadband Office, Inc.
         951 Mariner's Island Blvd.,
         Suite 700
         San Mateo, CA 94404

Chapter 11 Petition Date: May 9, 2001

Court: District of Delaware

Bankruptcy Case No.: 01-01720

Debtor's Counsel: David B. Stratton Esq.
                   Pepper Hamilton LLP
                   1201 N. Market Street, Suite 1600
                   Wilmington, DE 19801
                   (302) 777-6566

Estimated Assets: $10 Million to $100 Million

Estimated Debts: $10 Million to $100 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim     Claim Amount
------                        ---------------     ------------
UUNET                         Goods/services      $1,813,020
22001 Loudoun
County Parkway
Ashburn, VA 20147

Accenture LLP                 Goods/services      $1,727,878
PO Box 70629
Chicago, IL 60673-0629

Extreme Networks Credit Co    Goods/services      $1,297,318
Attn: Accounts Receivable
3585 Monroe St.
Santa Clara CA 95051

Hugh O'Kane Electric Co.,     Goods/services      $1,265,395
LLC
Attn: Cindy
88 White Street
New York, NY 10013

Amerilink Corp dba NACOM      Goods/services      $1,243,825
Attn: Doug Hyde
6525 W. Campus Oval
New Albany OH 43054

Communication Tech Services   Goods/services        $823,435
PO Box 1032
Northborough MA 01532

Portal Software, Inc.         Goods/services        $795,472
Attn: Chanel
198 Van Buren Street Suite 110
Herndon VA 20170

Braun Consulting              Goods/services        $793,762
Attn: Lora Ketchum
30 West Monore Street
Suite 300
Chicago, IL 60603-2401

Fisk Technologies             Goods/services        $660,541
Attn: Jackie
111 TC Jester Street
Houston, TX 77007

Idea Integration              Goods/services        $643,319
PO Box 281627
Atlanta, GA 30384-1627

Williams Communications       Goods/services        $568,035
Solutions, LLC
Attn: Linda Scheidle
21398 Network Place
Chicago, IL 60673-1213

Tiara Networks                Goods/services        $546,410
Attn: Lorie Astwood
529 Race Street
Suite 100
San Jose, CA 95126

Broadbay Networks             Goods/services        $527,449
Attn: Chuck Anderson
370 7th Street Attn: A/R
San Francisco, CA 94103

Halloran Robertson & Assoc     Goods/services       $509,515
One Almaden Blvd., 5th Floor
San Jose, CA 95113-2214

The Fishel Company             Goods/services       $390,100
Attn: Joseph Mayhew
PO Box 710746
Columbus, OH 43271-0746

HG Global Workplaces, Inc.     Goods/services       $390,000
HQ Sacramento, 16th Floor
980 Ninth Street
Sacramento, CA 95814-2736

Oracle Corporation             Goods/services       $375,301
Attn: Lily K. Hao
PO Box 71028
Chicago, IL 60694-1028

Proctor Electric               Goods/services       $367,287
Attn: Ed Howell
4483 Lottsford
Vista Road
Lanham Seabrook MD 20706

Dell                           Goods/services       $353,124
Attn: John Grey
PO Box 120001 Dept. 0680
Dallas TX 75312-1680

Brobeck, Phleger & Harrison    Goods/services       $324,554
12390 El Carmino Real
San Diego, CA 92130


CALYPTE BIOMEDICAL: Shares Face Delisting From Nasdaq
-----------------------------------------------------
Calypte Biomedical Corporation (Nasdaq: CALY) announced that it
was notified by Nasdaq that the Nasdaq staff had reached a
determination to delist Calypte's common stock from the Nasdaq
SmallCap Market. Nasdaq's decision to delist Calypte's common
stock was based on Nasdaq Marketplace Rule 4310(c)(2)(B) and
results from Calypte's failure to meet the three criteria
relating to net assets, market capitalization or net income.

Calypte has requested an oral hearing to review Nasdaq's
determination. The hearing request stays the delisting of
Calypte's common stock, which otherwise would have occurred on
May 21, 2001, pending the decision of a Nasdaq Listing
Qualifications Panel. There can be no assurance that the
decision of the Nasdaq Listing Qualifications Panel will be
favorable to Calypte. If Calypte's common stock is delisted
following the hearing, the Company's shares would likely trade
over the counter. Additionally, the Company's continued ability
to use its equity line of financing facility is dependent upon
its continued listing on the Nasdaq SmallCap Market and any
outstanding balance on its 6% convertible debenture would become
due and payable should the delisting occur.

Calypte's President, CEO and CFO, Nancy Katz, stated, "We
previously announced this possible action by Nasdaq a month ago,
and this determination letter from the Nasdaq staff is one more
step in the delisting process. While there can be no assurance
that the Listing Qualifications Panel will grant the company's
request for continued listing on the Nasdaq National Market, we
will continue to pursue all available means to maintain this
listing in concert with our active search for strategic
opportunities including investment in the Company, a merger or
other comparable transaction, the sale of certain of our assets
or a financial restructuring to sustain our operations. While
some of these opportunities are promising, we do not have any
agreements in place."

Calypte Biomedical Corporation (Nasdaq: CALY) headquartered in
Alameda, California, is a public healthcare company dedicated to
the development and commercialization of urine-based diagnostic
products and services for Human Immunodeficiency Virus Type 1
(HIV-1), sexually transmitted diseases and other infectious
diseases. Calypte's tests include the screening EIA and
supplemental Western Blot tests, the only two FDA-approved HIV-1
antibody tests that can be used on urine samples. The company
believes that accurate, non-invasive urine-based testing methods
for HIV and other infectious diseases may make important
contributions to public health by helping to foster an
environment in which testing may be done safely, economically,
and painlessly. Calypte sells its products in over 40 countries
worldwide through international distributors and strategic
partners.


CASTLE DENTAL: Taps Haynes & Boone As Counsel In Restructuring
--------------------------------------------------------------
Castle Dental Centers, Inc. announced that earnings before
interest, taxes, depreciation and amortization ("EBITDA"),
excluding restructuring costs and the cumulative effect of
adopting a change in accounting principle, was $4.1 million, an
increase of 14% over the first quarter of 2000. Operating income
of $2.4 million, excluding the impact of restructuring costs of
$0.5 million, increased by 19% over the same period last year.
EBITDA margin, excluding the restructuring charge and accounting
change, was equal to nearly 15% of net patient revenues for the
first quarter of 2001.

The Company reported a net loss of $541,000, or $(0.08) per
share, for the first quarter of 2001 compared to net income of
$312,000, or $0.05 per share, in the prior year period. Net
income was impacted by restructuring costs, increased interest
expense of $713,000 (of which $425,000 resulted from the accrual
of default interest and swap interest expense), and $250,000
representing the cumulative effect of adopting accounting
principle SFAS 133 concerning the accounting treatment for
derivative instruments and hedge agreements. Excluding
restructuring costs, accrued default interest, and the effect of
the accounting change, net income would have been $0.5 million,
or $0.08 per share, for the first quarter 2001.

Net patient revenues were $27.7 million for the first quarter of
2001, an increase of 4.5% over first quarter 2000 revenues of
$26.5 million, and 7.8% above fourth quarter 2000 revenues of
$25.7 million. Patient revenues from dental centers open more
than one year increased by 6.1% in the first quarter of 2001
compared to the same period last year.

During the month of March the Company began to implement a
restructuring plan. The implementation of this plan continues on
a going forward basis. The restructuring plan was developed by
Getzler & Company, a New York based management consultant and
restructuring firm, in conjunction with Company management. The
plan was presented to the Company's board of directors and
senior bank lending group in February 2001. In conjunction with
the adoption of the plan, Ira Glazer, Senior Vice President of
Getzler & Company, was appointed interim chief executive officer
of the Company as of March 1, 2001.

Mr. Glazer commented, "We are satisfied with the results of the
first quarter. We are encouraged by our progress in exceeding
the expectations of the restructuring plan. The Company has
reorganized management, both at the field and corporate levels.
We have added personnel and continue to implement new procedures
and reports to control and improve our collections of accounts
receivables. We have realigned our marketing and advertising
programs; and, eight under-performing dental centers have been
closed across the country. While there are risks inherent in any
restructuring plan, we remain hopeful that the continued
implementation of the plan will generate improved financial
performance going forward."

Glazer continued, "We continue to negotiate with our senior
lenders to achieve an acceptable forbearance agreement. To
assist the Company in negotiation of this matter we have engaged
Haynes & Boone, LLP as legal counsel. Although there can be no
assurance given as to the ultimate success of these
negotiations, management believes it is reasonable to assume
that the Company will receive a forbearance agreement from its
lenders."

Castle Dental Centers, Inc. develops, manages and operates
integrated dental networks through contractual affiliations with
general, orthodontic and multi-specialty dental practices in the
U.S. The Company presently manages 93 dental centers with
approximately 200 affiliated dentists in Texas, Florida,
Tennessee and California.


CASUAL MALE: Denies Bankruptcy Reports
--------------------------------------
Casual Male Corp. said that rumors claiming that the men's
clothing retailer will shortly file for chapter 11 bankruptcy
protection are "just speculation," according to Dow Jones. On
Tuesday, the Boston Globe reported that Casual Male might have
to seek bankruptcy protection, citing its inability to file its
fiscal 2001 annual report on time with the Securities and
Exchange Commission. The Canton, Mass.-based company said that
it was negotiating "significant" new market transactions, which,
if not consummated, may affect the company's financial results.
Steven Bowles, an investor relations spokesman, said that the
company continues to seek new sources of capital in the form of
debt or equity, or both. (ABI World, May 16, 2001)


CT HOLDINGS: Shares Knocked off Nasdaq, Now Trading On OTCBB
------------------------------------------------------------
CT Holdings, Inc. (Nasdaq: CITN) announced that on May 16, 2001,
it received a Nasdaq Staff Determination indicating the
Company's securities would be delisted from The Nasdaq National
Stock Market, and would trade on the OTC Bulletin Board
effective with the open of business on May 17, 2001 under the
same symbol - CITN.

The Company previously announced that it had received a Nasdaq
Staff Determination indicating the Company no longer complied
with the continued listing requirements of The Nasdaq Stock
Market, and that its securities were therefore subject to being
delisted from the Nasdaq National Market. The Company exercised
its right to appeal the Staff Determination and requested a
hearing before a Nasdaq Listing Qualifications Panel. The
hearing occurred on April 16, 2001 and today's Nasdaq Staff
Determination was the culmination of this hearing.

Nasdaq has advised CT Holdings that the Nasdaq Listing and
Hearing Review Council may, on its own motion, determine to
review any Panel decision within 45 calendar days after issuance
of the written decision. If the Listing Council determines to
review this decision, it may affirm, modify, reverse, dismiss,
or remand the decision to the Panel. The Company will be
immediately notified in the event the Listing Council determines
that this matter will be called for review. The Company may also
request that the Listing Council review this decision. The
request for review must be made in writing and received within
15 days from the date of this decision. The institution of a
review, whether by way of the Company's request, or on the
initiative of the Listing Council, will not operate as a stay of
this decision. The Company plans to request a review of the
decision within the 15 day period.

CT Holdings, Inc. (NASDAQ: CITN), is a developer of early stage
companies, including Parago, Inc. and River Logic. For more
information on CT Holdings, our Internet holdings, and our
Citadel Technology line of security software products, please
visit our Web site at www.ct-holdings.com.


DERBY CYCLE: S&P Cuts Long-Term, Bank Loan Ratings to D From CCC
----------------------------------------------------------------
Standard & Poor's lowered its long-term corporate credit and
bank loan ratings on the U.K.-based bicycle manufacturer Derby
Cycle Corp. to 'D' from triple-'C'. At the same time, the senior
unsecured debt ratings on Derby and related entity Lyon
Investments B.V. were lowered to 'D' from double-'C'. These
rating actions follow the company's announcement that it
will not be making the scheduled interest payment for May 15,
2001, on both the $100 million 10.0% senior notes issue due 2008
and the DM110 million ($53 million) 9.375% senior notes issue
due 2008. The company is also in default of the covenants on the
outstanding amount of its senior secured revolving credit
facility, and it is unlikely that the interest payment will be
met within the 30-day grace period on the notes.

Derby has been under significant financial pressure for the last
few months, following deterioration in its operating performance
in fiscal 2000. Despite having restructured the $30 million
working capital requirement for its quarter-one 2001
manufacturing operations at the end of 2000, the company has
found its financial resources insufficient to continue servicing
the existing debt. Derby is currently negotiating the
restructuring of its outstanding securities with an informal
committee of bondholders, Standard & Poor's said.


DOLPHIN TELECOM: Says It May Not Be Able To Pay Debts This Year
---------------------------------------------------------------
Dolphin Telecom plc, a subsidiary of Telesystem International
Wireless Inc. (NASDAQ: TIWI) (TSE: TIW.), reported its results
for the first quarter ended March 31, 2001.

                          Highlights

For the first quarter ended March 31, 2001, all amounts are in
US$, unless otherwise stated

      - As of March 31, 2001, 61,900 ESMR subscribers were
connected to Dolphin's Enhanced Specialized Mobile Radio (ESMR)
networks. As previously announced, Dolphin had a lower
connection rate than expected during the first quarter. Net ESMR
subscriber additions in the first quarter of 2001 were 10,400.
Dolphin expects to increase the rate of subscriber additions
starting at the end of the second quarter of 2001, following the
introduction of new generation handsets from Nokia and Motorola.
In association with the availability of the new handsets Dolphin
will implement a new marketing campaign offering an expanded
choice of services and tariffs packages to customers.

      - Total service revenues were $19.9 million for the three-
month period ended March 31, 2001, compared to $19.7 million for
the corresponding period of 2000. Service revenues from the
increase in ESMR subscribers were to a large extend offset by
the anticipated decline in the Specialized Mobile Radio (SMR)
customer base. Equipment revenues stood at $3.9 million for the
first quarter of 2001, compared to $1.9 million for the
corresponding period of 2000. The increase in revenues reflects
the increase in gross additions as a result of ESMR promotional
activities in the United Kingdom (U.K.).

      - Operating loss before depreciation, amortization and
impairment of long-lived assets was $52.4 million for the three-
month period ended March 31, 2001, while it stood at $38.1
million for the corresponding period of 2000. The launch of
commercial ESMR services in the United Kingdom and in France as
well as continued ESMR network build-out efforts contributed to
the increased operating losses.

      - In France, following the launch of pilot commercial ESMR
services in the regions of Nord/Pas-de-Calais and Rhone-Alpes in
the fourth quarter of 2000, service was launched in the regions
of Provence/Cote d'Azur and Paris in the first quarter of 2001.

      - At the end of the first quarter in 2001, Dolphin
announced revised business plans to focus efforts and resources
on its more mature markets of the U.K. and France. The revised
business plans are designed to reduce costs and will result in
delays to operational activity in Germany and Belgium and a
reduction in the company's workforce of up to 600 positions. In
the first quarter of 2001, the Company recorded a charge of
$264.8 million for impairment in long-lived assets in countries
where ESMR services have not yet been launched.

      - The net loss in the first quarter of 2001 was $325.0
million, compared to a net loss of $81.0 million for the
corresponding period of 2000. The net loss for the quarter was
negatively effected by higher financing costs, which were partly
offset by a foreign exchange gain of $22.6 million. The increase
in net loss is mainly attributable to an impairment provision of
$240 million, net of tax effect, taken against certain long-
lived assets in countries where services were not yet launched.

      - During the quarter, Dolphin Corporation Limited (a direct
wholly- owned subsidiary of Dolphin Telecom plc) borrowed 106.4
million pounds sterling ($154.4 million) from its principal
shareholder, TIW. In December 2000, TIW indicated its intention
to provide financial assistance of up to $300 million in
convertible loans to support Dolphin's growth in 2001, based on
the achievement of technological, operational and financial
milestones.

      - As previously announced, Dolphin has initiated a process
of seeking external financing, including by way of strategic
partnerships; Dolphin does not expect an outcome to this process
until the third quarter. If Dolphin were unable to obtain
additional financing and to refinance or amend the terms of its
current credit facilities, its ability to meet its obligations
over the next 12 months would be uncertain.

As of March 31, 2001, Dolphin reached 61,900 ESMR (Enhanced
Specialized Mobile Radio) subscribers in the United Kingdom and
France. During the first quarter, the Company added 10,400 net
ESMR subscribers, approximately 4,500 below management's
internal expectations at the beginning of the year. As
previously announced, connection rates in the first quarter of
2001 have run at a lower level, reflecting the traditional
weakness of the first quarter and problems encountered in the
supply chain for vehicular adaptors (car kits). Normal volumes
and supply have been restored since April and the Company
expects second quarter net additions in the United Kingdom of
approximately 12,000 subscribers.

Marketing and promotional efforts are being focused around the
commercial introduction of a new generation of handsets towards
the end of the second quarter. In conjunction with the
availability of the new handsets, Dolphin will implement a new
marketing campaign offering an expanded choice of services and
tariff packages to customers. Dolphin expects the rate of ESMR
subscriber additions to increase with the commercial launch of
the new handsets and offerings and accordingly maintains its net
subscriber additions target of 100,000 for the year. ESMR new
generation handsets from Nokia and Motorola have been received
by Dolphin and are currently being tested extensively in
preparation for commercial launch.

"The first quarter of 2001 represents a slowing of the rate of
net subscriber additions compared to the last quarter of 2000,
but nevertheless we have continued to make significant headway
in the mobile business market. We signed up significant customer
wins in the quarter, including KLM Ground Services and WHSmith
News, and in the last month have continued to add new large
corporate accounts, such as Woolworths in the U.K. and Societe
des Autouroutes Paris-Rhin-Rhone (SAPRR) in France. In the U.K.,
we are now scaling up our distribution channels and finalizing
our marketing plans in preparation for the launch of new lighter
and slimmer handsets this summer. With the benefits of new
handsets, increased sales channels and strong marketing
promotions, we will aggressively pursue new business accounts in
the second half of 2001," said Steven Evans, Chief Executive
Officer.

"During the first quarter we took deliberate actions to focus
our efforts and resources on our most mature markets of the U.K.
and France and I am confident our performance in the second half
of the year will demonstrate increased market penetration of our
ESMR services in these primary countries, particularly in the
U.K.", added Mr. Evans.

Dolphin has set a target for ESMR subscriber growth in the
United Kingdom in 2001 of 100,000 subscriber additions to reach
150,000 by year-end. This objective takes into account the
current size of the addressable market while considering the
availability of a new generation of handsets. In addition to
being significantly lighter in weight, these handsets are
expected to feature a slimmer form factor, longer battery life
and higher voice quality. The new handsets will also feature
enhanced functionalities for improved text messaging and better
designs for packet data transmission services to be introduced
at the end of this year or the start of 2002. Given the sales
cycles in the business market, Dolphin expects the impact of the
new generation of handsets on subscriber growth to be reflected
in the second half of 2001.

In France, Dolphin introduced pilot commercial ESMR services in
the regions of Nord/Pas-de-Calais and Rhone-Alpes in the fourth
quarter of 2000, and in the regions of Provence/Cote d'Azur and
Paris in the first quarter of 2001. Dolphin will continue to
build-out and densify its network in these four regions, but the
introduction of commercial ESMR services in four additional
regions scheduled for the second half of 2001 will be delayed
until the first half of 2002. Dolphin will continue to market
and commercialize its ESMR services on a regional basis during
2001.

During the first quarter of 2001, Dolphin announced actions to
reduce costs and concentrate its efforts and financial resources
on its United Kingdom operations and the four regions of France
in which it offers ESMR services. Capital spending has been
scaled back in other regions of France as well as in Germany and
Belgium and the total Dolphin workforce is being reduced by up
to 600 positions, mainly in Germany.

As a result of the changes in its business plan, Dolphin has
provided for impairment in the value of certain long-lived
assets in countries where ESMR services will be curtailed or
delayed. In aggregate, $264.8 million has been expensed in the
first quarter of 2001, before deduction of $24.8 million for
deferred income taxes. This write-down is a non-cash expense.

In Germany, Dolphin intends to switch on its ESMR network at the
end of June 2001, as scheduled in the four main economic regions
of Berlin, Frankfurt, Hamburg and Rhein-Ruhr. However, Dolphin
will not introduce full commercial ESMR services in these
regions or continue to build-out its ESMR network in other
regions in 2001. The network is intended to be used to pilot
commercial ESMR services for the first time in Germany.

Dolphin closed the first quarter of 2001 with a total subscriber
base of 268,000 at March 31, 2001, compared to 273,500 at
December 31, 2000. Total Specialized Mobile Radio (SMR)
subscribers were 206,100 at March 31, 2001, a net decline of
15,900 subscribers, compared to 222,000 as of December 31, 2000.

                    Review of Operations

Total service revenues were $19.9 million for the three-month
period ended March 31, 2001, compared to $19.7 million for the
corresponding period of 2000. Service revenues have been
negatively affected by the anticipated decline in the SMR
customer base, which was not totally offset by the increase of
ESMR subscribers. ESMR ARPU stood at $42 for the quarter, a 5%
increase over the previous quarter, the main contributor to the
increase has been a higher level of calls outside the Dolphin
network (PSTN).

Equipment revenues stood at $3.9 million for the first quarter
of 2001, compared to $1.9 million for the corresponding period
of 2000. The increase in revenues reflects the increase in gross
additions as a result of ESMR promotional activities in the
United Kingdom. Cost of equipment amounted to $11.8 million for
the three-month period ended March 31, 2001, compared to $6.9
million for the corresponding period of 2000. The increase in
cost of equipment reflects the Company's policy on subsidy.

Cost of services amounted to $26.6 million for the three-month
period ended March 31, 2001, compared to $22.4 million for the
corresponding period of 2000. The negative margin on services
for the first quarters of 2001 and 2000, is mainly attributable
to the launch of ESMR services in the United Kingdom and France,
and a declining SMR subscriber base. A negative margin is
expected in the following quarters until the Company reaches a
critical mass of ESMR subscribers to cover the fixed cost of
operating its ESMR networks.

Selling, general and administrative expenses increased by $7.3
million to reach $37.7 million in the first quarter of 2001 when
compared to the corresponding period of 2000. Increased selling
and marketing activities in the United Kingdom for ESMR services
and regional selling and marketing activities in France for the
launch of commercial ESMR services are the main contributors for
the increase.

Operating loss before depreciation, amortization and impairment
of long-lived assets was $52.4 million for the three-month
period ended March 31, 2001, compared to $38.1 million for the
corresponding period of 2000. The launch of commercial ESMR
services in the United Kingdom and in France as well as
continued ESMR network build-out efforts contributed to the
increased operating losses.

Depreciation and amortization amounted to $28.3 million for the
first quarter of 2001, compared to $23.7 million for the
corresponding period of 2000. The increase is mainly
attributable to the increased tangible assets base. During the
first quarter, the Company recorded an impairment provision of
$240 million, net of deferred income taxes of $24.8 million,
against the value of certain long-lived assets in countries
where ESMR services were not yet launched.

The net loss in the first quarter of 2001 was $325.0 million,
compared to a net loss of $81.0 million for the corresponding
period of 2000. The net loss for the quarter was negatively
effected by higher financing costs, which were partly offset by
a foreign exchange gain of $22.6 million. The increase in net
loss is mainly attributable to the above mentioned impairment
provision.

               Liquidity and Capital Resources

As of March 31, 2001, the Company held cash and cash equivalents
of $39.3 million, compared to $62.7 million as of December 31,
2000. The decrease is primarily due to operating expenses and
capital expenditures attributable to the build-out of the
Company's ESMR networks in the United Kingdom, France, Germany
and Belgium and selling and marketing expenses following the
launch of ESMR services in the United Kingdom and France, partly
offset by the proceeds from a loan from a related party.

Cash used in investing activities in the three-month period
ended March 31, 2001 amounted to $36.4 million. The Company
continued to invest in the acquisitions of tangible fixed assets
in relation to the build-out of its ESMR networks and support
systems in the United Kingdom, France and Germany.

During the quarter, Dolphin Corporation Limited (a direct
wholly-owned subsidiary of Dolphin Telecom plc) borrowed 106.4
million pounds sterling ($154.4 million) from its principal
shareholder, TIW. In December 2000, TIW indicated its intention
to provide financial assistance of up to $300 million in
convertible loans to support Dolphin's growth in 2001, based on
the achievement of technological, operational and financial
milestones.

In April 2001, in connection with obtaining a waiver until May
31, 2001 from the fulfillment of certain covenants, Dolphin's
$250 million German Credit Facility was reduced to 110 million
Euro (96,4 millions $), the amount currently outstanding.
Dolphin expects to be in breach of certain covenants relating to
this facility in 2001. Dolphin is currently in discussions with
respect to these covenants, the outcome of which remains
uncertain. The facility is classified as short-term liabilities.
During 2000, in connection with obtaining a waiver from the
fulfillment of a certain covenant, Dolphin's pounds sterling 215
million ($317 million) United Kingdom bank credit facility was
reduced to pounds sterling 64 million ($90.6 million), the
amount currently outstanding, and maturity was brought forward
to June 30, 2001. Dolphin is currently in discussions with
respect to the refinancing of this facility, the outcome of
which remains uncertain.

The Company's ability to realize its assets and meet its
obligations in the normal course of business over the next 12
months is uncertain. Should it be unable to do so, the Company's
assets may be impaired by a material amount in addition to the
$264.8 million charge recorded in the three-month period ended
March 31, 2001. If Dolphin were to be in default of its
financial obligations, the repayment of its Senior Discount
Notes could be accelerated under cross default provisions. The
Company's ability to meet its obligations over the next 12
months is dependent upon obtaining additional financing, as well
as refinancing or amending the terms of its current credit
facilities.

As previously announced, Dolphin has initiated a process of
seeking external financing, including by way of strategic
partnerships. Dolphin does not expect an outcome to this process
until the third quarter.

As of March 31, 2001, total assets amounted to $905.0 million
with long-term debt (including current maturities and loans due
to a related party) of $1,075.3 million.

As of March 31, 2001, the Company owed its principal shareholder
an aggregate of $331.9 million, including loans contracted in
2000.

                  About Dolphin Telecom plc

Dolphin Telecom is building digital ESMR networks in Europe. It
began offering national commercial ESMR services in the United
Kingdom in the third quarter of 1999, and launched pilot
commercial ESMR services, on a regional basis, in France in the
fourth quarter of 2000.

Dolphin, which groups TIW's SMR and ESMR activities in the
United Kingdom, France, Germany, Belgium, Luxembourg, Portugal
and Spain, is the largest SMR and ESMR operator in Europe,
serving approximately 268,000 subscribers. It holds licenses
covering a population of more than 248 million.

                         About TIW

TIW is a rapidly-growing, global mobile communications operator
with over 4.2 million subscribers worldwide. The Company's
shares are listed on the Toronto Stock Exchange ("TIW") and
NASDAQ ("TIWI").

In addition to its Dolphin operations, TIW is the strategic
partner in two leading cellular operators in Brazil. In Central
and Eastern Europe, TIW is a cellular market leader in Romania
and launched services in the Czech Republic in March 2000.


DOLPHIN TELECOM: Moody's Downgrades Notes' Rating To Ca
-------------------------------------------------------
Moody's ratings on Dolphin Telecom Plc's notes fell to Ca from
Caa3. Said notes are as follows:

      - unsecured issuer rating

      - $263.0 million 11.5% senior discount notes due 2008

      - EUR 238.0 million 11.625% senior discount notes due 2008

      - $295.0 million 14.0% senior discount notes due 2009

The rating agency also downgraded Dolphin's senior implied
rating to Caa3 from Caa1. The ratings remain on negative outlook
while approximately $766.5 million of debt securities are
affected.

Accordingly, the downgrade of the notes reflects Moody's
concerns relating to Dolphin's ability to remain as a going
concern. Dolphin's survival is said to be dependent upon being
able to obtain additional funding as well as refinancing or
gaining additional amendments to the terms of its current credit
facilities. However, Moody's said Dolphin has extremely limited
financial flexibility and little time to manoeuvre.

Based in Basingstoke, England, Dolphin is a provider of
specialized mobile radio services to mobile workforces, and
intends to build a Pan-European digital-enhanced specialized
mobile radio network.


DYERSBURG CORPORATION: Downsizing Operations To Reduce Costs
------------------------------------------------------------
Dyersburg Corporation (OTCBB: DBGC) announced that it will
consolidate and downsize its operations. The Company cited
general economic trends and increased competition from abroad as
the reasons for its operational changes. The changes will begin
to take effect immediately.

As part of its strategy to return to profitability, Dyersburg
intends to consolidate its textile manufacturing operations to
two facilities. The Company also said that it intends to sell
its stretch division, United Knitting. The consolidation will
not affect its ability to deliver product to customers.

As a result of the consolidations, Dyersburg's company-wide
workforce will be reduced by approximately 900 employees. The
reductions will be from manufacturing, sales and corporate
positions. The Company currently employs about 2,100 people.
T. Eugene McBride, chairman of the board and chief executive
officer of Dyersburg Corporation, said, "For some time now, we
have been examining our operations in order to improve our
efficiency and remain viable in the current economic conditions.
We had hoped to avoid personnel reductions. However, with the
downturn in the general economy and increased competition from
low-cost producers abroad, we had little choice but to make the
difficult decision to downsize our operations. We deeply regret
the loss of jobs, but feel that Dyersburg will be better able to
remain viable and competitive with this new structure."

Dyersburg continues to implement its previously announced
restructuring plan and work towards an orderly exit from Chapter
11 protection. The Company said that its restructuring plan was
not a factor in the decision to downsize its operations. Trade
creditors will continue to be paid and will be unaffected by the
operational changes.

Dyersburg is one of the largest domestic marketers of circular
knit fleece, jersey and stretch knit fabrics. The Company
produces fabrics that are used principally for activewear,
bodywear, outerwear and various branded sportswear. Dyersburg
also operates a garment packaging business with production in
the Dominican Republic and Central America. For more
information, please visit the Company's web site at
www.Dyersburg.com.


EDISON INT'L: Board Decides To Eliminate Q2 Dividend Payments
-------------------------------------------------------------
The board of directors of Edison International (NYSE: EIX) voted
to eliminate payment of the second-quarter dividend on its
common stock that customarily would have been paid on July 31,
2001, because of financial conditions created by California's
ongoing energy crisis.

In addition, Edison International's electric utility subsidiary
Southern California Edison Company announced that its board of
directors decided to defer the quarterly dividends on SCE's
4.32% series of cumulative preferred stock and its 6.05% and
6.45% series of $100 cumulative preferred stock that would have
been payable on June 30, 2001, and on SCE's 7.23% series of $100
cumulative preferred stock that would have been payable on July
31, 2001.

The SCE board also decided to continue the previous deferral of
quarterly dividends on its preferred stock payable on and after
February 28, 2001.

Based in Rosemead, Calif., Edison International is a premier
international electric power generator, distributor and
structured finance provider.  With assets of $36 billion and a
portfolio of approximately 28,000 MW, Edison International is an
industry leader in privatized, deregulated and incentive-
regulated markets and power generation.  It is the parent
company of Southern California Edison, Edison Mission Energy,
Edison Capital, Edison O&M Services, and Edison Enterprises.


FUTUREONE: Releases Second Quarter Results
------------------------------------------
FutureOne, Inc. (OTC Bulletin Board: FUTO), www.futureone.com,
reported second quarter revenues and earnings in its 10-QSB
filed with the U.S. Securities and Exchange Commission,
www.sec.gov.

Ralph R. Zanck, Vice President of Finance stated, "We continue
to see the results of our program to divest unprofitable
business segments. The operating loss for this quarter was
$291,000 compared to over $1,339,000 for the same quarter last
year. In addition, general and administrative expenses for the
second quarter of fiscal year 2001 were $772,000, compared to
$1,147,000 for the second quarter of fiscal year 2000."

He also reported, "For the second consecutive quarter the
Company had positive EBITDA (earnings before interest, income
taxes, and depreciation and amortization). The Company's EBITDA
from continuing operations for the second quarter was $74,000."

For the quarter ended March 31, 2001, the Company reported
revenues from continuing operations of $4,072,000 compared to
$3,234,000 for the corresponding period of fiscal year 2000. The
net loss for the quarter was $.03 per share compared to a net
loss of $.15 per share for the same quarter of fiscal year 2000.
For the six months ended March 31, 2001, the Company reported
revenues from continuing operations of $7,330,000 compared to
$6,895,000 for the corresponding period of fiscal year 2000. The
net loss for the first six months of fiscal year 2001 is $.04
per share compared to a net loss of $.18 per share for the first
six months of fiscal year 2000.

President and CEO, Donald D. Cannella, commented, "We have
increased our revenues 25% from the second quarter of fiscal
2000, because we have expanded our capacity to utilize sub-
contractors and increased focus on winning bids on medium-sized
projects. We believe these strategies will provide an overall
increase in revenues and gross margins in the future and we
expect future operating results to show continued improvement."

                     About the Company

FutureOne, Inc. recently filed for protection from its creditors
under Chapter 11 of the U.S. Bankruptcy Code. The Company has
divested its unprofitable operations and consolidated and down-
sized its corporate overhead to allow it to focus totally on
providing telecommunications infrastructure installation, and
related services, through its wholly owned subsidiary OPEC
CORP., www.opeccorp.com. OPEC has not sought protection from its
creditors under Chapter 11 and will continue to operate
unaffected by the bankruptcy filing. OPEC provides a
comprehensive range of telecommunications services, which
include the design, engineering, placement and maintenance of
aerial and underground fiber-optic, coaxial and copper cable
systems for major communications companies, utility providers,
and real estate developers in the western United States. OPEC
also provides auxiliary services such as, copper and fiber
splicing, horizontal drilling and boring, network repair and
maintenance, commercial and residential installations, testing,
line conditioning and construction management services.


GENESIS HEALTH: Seeks Court Nod On Swap Settlement With Citibank
----------------------------------------------------------------
Genesis Health Ventures, Inc. & The Multicare Companies, Inc.
sought the Court's approval, pursuant to Rule 9019(a) of
the Federal Rules Bankruptcy Procedure, of a Settlement
Agreement by and among GHV and Citibank, N.A. to resolve the
dispute over Citibank's claim arising from the Bank's exercise
of its right to terminate the Citibank Swap Agreements upon the
Debtors' default under the Credit Agreement. The Settlement will
result in the reduction of Citibank's secured claim in the
amount of $28,548,000 to $17,290,962 with the balance of
$11,257,038 allowed as an unsecured claim against GHV. The
dispute centered upon (1) whether two Supplemental Swap
Agreements had been identified in the Original Acceptance Letter
for qualification for Interest Rate Hedging Agreements; (2)
Market Quotations on the amount of termination obligations under
the Citibank Swap Agreements.

The Debtors indicated that the Committee and Mellon Bank, N.A.,
as agent for the Debtors' senior lenders, support the approval
of the Settlement Agreement.

                          Background

GHV and Citibank were parties to 8 interest rate hedging
agreements and related documents in connection with the Fourth
Amended and Restated Credit Agreement, dated as of August 20,
1999, by and among the GHV Debtors as Borrowers, Mellon Bank,
N.A., as administrative agent (the Agent), certain other agents,
and the lender parties.

As previously reported, the obligations of the Borrowers under
the Credit Agreement are secured by substantially all the
property of the Borrowers (the Collateral) pursuant to the terms
of collateral documents identified in the Credit Agreement.

The Collateral Documents include, but are not limited to, the
Fourth Amended and Restated Collateral Agency Agreement, dated
as of August 20, 1999, among the Borrowers and Mellon Bank,
N.A., in its capacity as administrative agent, synthetic lease
facility agent, and collateral agent (the Collateral Agency
Agreement).

                Provision in Credit Agreement for
       Interest Rate Hedging Agreements (Swap Agreements)

The loans to the Debtors under the Credit Agreement bear
interest at a floating rate. On the Commencement Date, over $1
billion was outstanding under the Credit Agreement. Inasmuch as
minor changes in the floating rate can make significant
additional demands on the liquidity of the Debtors, the Credit
Agreement requires the Borrowers to maintain certain interest
rate hedging agreements, commonly referred to as "swap
agreements," to reduce the risks of such interest rate
fluctuations. In particular, Section 6.12 of the Credit
Agreement requires the existence, at all times, of interest rate
hedging agreements that change at least 50% of the floating rate
risk under the Credit Agreement to fixed raterisk.

As an incentive for a financial institution to provide interest
rate hedging agreements on reasonable terms, the Credit
Agreement and the related Collateral Documents provide that the
obligations of the Borrowers under any "qualifying" interest
rate hedging agreements are entitled to be secured by the same
Collateral as the obligations under the Credit Agreement.
Section 10.13 of the Credit Agreement sets the standard for when
an interest rate hedging agreement "qualifies" to share in the
Collateral (a Qualifying Interest Rate Hedging Agreement).

An interest rate hedging agreement "qualifies" if (i) the Agent
gives its written consent and (ii) the party to the proposed
Qualifying Interest Rate Hedging Agreement with the Borrowers
signs a joinder to the Credit Agreement agreeing to the terms
thereof.

Under section 2.3 of the Collateral Agency Agreement, a
Qualifying Interest Rate Hedging Agreement arises if, inter
alia, the party to a proposed Qualifying Interest Rate Hedging
Agreement delivers written notice to the Agent that sets forth
the following information with respect to the agreement: the
notional principal amount, the parties to such agreement, the
interest rate payable thereunder, the interest rate paid
pursuant to the Credit Agreement and Collateral Documents and
the term thereof; along with a certified copy of the Qualifying
Interest Rate Hedging Agreement and a statement that by
delivering such notice, such counterparty agrees to become a
party to the Collateral Agency Agreement, and be bound thereby
as a "Swap Party," as that term is defined in the Collateral
Agency Agreement.

     Swap Agreements Between the Debtors and Citibank

GHV and Citibank entered into a standard International Swap
Dealers Association, Inc. (ISDA) agreement, dated July 15, 1994,
that provided the basic terms for the issuance, operation, and
termination of interest rate hedging agreements entered
thereunder. The 1994 ISDA Agreement was amended and superceded
by an updated standard ISDA Agreement, dated September 23, 1998.

In accordance with the terms of the ISDA Agreements, GHV and
Citibank entered into 8 interest rate hedging agreements. These
agreements, which are supplements to, form a part of, and are
subject to the ISDA Agreements, are known as "Confirmations" or
"Swap Agreements." On March 20, 2000, the following Swap
Agreements between GHV and Citibank were outstanding (the
Citibank Swap Agreements): 98L050, 98L051, 98L077, 98S059,
98L079, 98L079DN, 98L096, 98L096DN.

By letter, dated June 18, 1999, Citibank submitted a list and
description of certain of the Citibank Swap Agreements to the
Agent for acceptance as Qualifying Interest Rate Hedging
Agreements, which the Agent countersigned and returned to
Citibank. The Acceptance Letter listed the following Swap
Agreements by transaction number: 98L050, 98L051, 98L077,
98S059, 98L079, 98L096.

Swap Agreements 98L079DN and 98L096DN became a subject of
dispute.

       Citibank's Termination of the Swap Agreements

Under Section 5 of the 1998 ISDA Agreement, Citibank has the
contractual right to terminate the Citibank Swap Agreements if
an event of default occurs, including an event of default as
specified under the Credit Agreement. The interest rates at the
time of such a termination (and projections of where interest
rates may move in the future) affect whether the Borrowers owe
amounts to Citibank or vice versa at the time of termination.

The Termination Guidelines provided in the 1998 ISDA Agreement
include a requirement that the party exercising its right to
termination must seek bids (the Market Quotations) from four
independent parties that are in the business of entering into
interest hedging agreements (the Reference Market-makers).

In March 2000, the Borrowers' failure to make certain interest
payments as required under the Credit Agreement constituted an
event of default. By letter dated March 24, 2000, Citibank
exercised its right to terminate the Citibank Swap Agreements
and sought bids from Reference Market-makers to determine the
amounts owed under the Swap Agreements. Citibank received bids
from three of the four companies it contacted, which is
sufficient to calculate a valid Market Quotation under the 'ISDA
Agreement'.

On March 29, 2000 and April 3, 2000, Citibank sent letters
asserting a claim against the Borrowers in the amount of
$28,548,000. The claimed amount was based on an analysis of the
Market Quotations for the Citibank Swap Agreements provided by
the Reference Market-makers. Citibank also asserted that the
claimed amount was entitled to share in the Collateral.

After the Commencement Date, Mellon Bank, N.A. filed a proof of
claim dated December 12, 2000 on behalf of, inler alia, Citibank
in the Debtors' chapter 11 cases for amounts owed by the
Borrowers due to the termination of the Citibank Swap
Agreements.

          Dispute Between the Debtors and Citibank

By letter dated May 11, 2000, the Borrowers informed Citibank
that with respect to the termination of the Swap Agreements,
they believed Citibank did not meet certain procedures outlined
in the Termination Guidelines. Furthermore, the Borrowers stated
there were a number of unresolved issues with respect to the
existence and magnitude of the claims asserted by Citibank.

By letter dated June 2, 2000, (the Supplemental Letter), and in
order to supplement the Acceptance Letter, Citibank provided the
Agent with the description of two Swap Agreements which had not
been listed or described in the original Acceptance Letter (the
Two Supplemental Swaps) identified as transaction numbers
98L079DN and 98L096DN.

(A) Contention over the Two Supplemental Swaps

     The Borrowers contend that the Two Supplemental Swaps,
identified in the Supplemental Letter, did not become Qualifying
Interest Rate Hedging Agreements because they were not
identified in the Acceptance Letter. Citibank asserts that all
the Citibank Swap Agreements, including the Two Supplemental
Swaps, were identified in the Acceptance Letter. In particular,
Citibank maintains that the Two Supplemental Swaps were
derivatives of two swaps listed in the Acceptance Letter, and
that the Supplemental Letter merely clarified their contention.
Thus, Citibank maintains that all the Citibank Swap Agreements,
including the Two Supplemental Swaps, were Qualifying Interest
Rate Hedging Agreements and that the claims asserted due to
their termination are secured.

(B) Contention over Market Quotations

     As a check on the Market Quotations furnished by Citibank
and in anticipation of litigation with Citibank, attorneys for
the Borrowers retained Deloitte & Touche LLP to provide an
analysis of the amount of termination obligations under the
Citibank Swap Agreements. Attorneys for the Borrowers provided
D&T with the same materials sent by Citibank to the Reference
Market-makers. D&T's analysis confirmed the magnitude of the
amounts asserted by Citibank, although its quotes in the
aggregate were approximately 13% lower.

                The Settlement Agreement

In order to resolve the disputes, GHV and Citibank proposed to
enter into the Settlement Agreement.

Pursuant to the terms of the Settlement Agreement, the Debtors
and Citibank agree that:

      -- the Two Supplemental Swaps are not secured by the
Collateral;

      -- for purposes of calculating the amount of the
termination claims of the Citibank Swap Agreements that are
secured by the Collateral, the quotations provided by D&T would
be used as if D&T was the fourth Reference Market-maker.

Accordingly, the formula in the 1998 ISDA Agreement results in a
total secured claim of $17,290,962. The balance of $11,257,038
will be an allowed unsecured claim against GHV, the parties
agree. (Genesis/Multicare Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GTC TELECOM: Needs More Funds To Continue As A Going Concern
------------------------------------------------------------
GTC Telecom Corporation has negative working capital of
$5,386,310, liabilities from the underpayment of payroll taxes,
contingent liabilities from cancelled contracts, a stockholders'
deficit of $5,097,168, losses from operations through March 31,
2001 and a lack of operational history, among other matters,
that raise substantial doubt about its ability to continue as a
going concern.

The Company hopes to continue to increase revenues from
additional revenue sources and increase margins as a result of
amending its contract with MCI/WorldCom and other cost cutting
measures. In the absence of significant revenues and profits,
the Company intends to fund operations through additional debt
and equity financing arrangements which management believes may
be insufficient to fund its capital expenditures, working
capital, and other cash requirements for the fiscal year ending
June 30, 2001. Therefore, the Company may be required to seek
additional funds to finance its long-term operations. The
successful outcome of future activities cannot be determined at
this time and there are no assurances that if achieved, the
Company will have sufficient funds to execute its intended
business plan or generate positive operating results.

These circumstances raise substantial doubt about the Company's
ability to continue as a going concern.


HARNISCHFEGER: Resolves Claim Dispute with NatWest Bank
-------------------------------------------------------
Smoothing-out one more bump in the road to confirmation of its
Plan, and in order to resolve any remaining issues over the
matter, Harnischfeger Industries, Inc. and Westminster Bank PLC
presented for the Court's approval a proposed Stipulation and
Order form which essentially represents the parties' agreement
to the proposed treatment of the Barclays Claim as provided in
the Debtors' Third Amended Joint Plan of Reorganization, as at
the date the parties entered into the stipulation.

The Debtors' Third Amended Joint Plan comes after a series of
events and a Prior Stipulation regarding the Westminster Claim.
It provides that:

      (a) the Stipulated Westminster Claim is to be expunged as
          against HII and
      (b) the Guarantee and Modified Financing Guaranty are to
          remain in full force and effect as against New HII post
          confirmation, consistent with the Prior Stipulation;

                       NatWest's Claim re
            Revolving Credit Agreement and Guarantee

On or about February 24, 2000, NatWest filed an unsecured claim
in the amount of $96,947,533 (the Westminster Claim) which was
comprised of two components:

      (1) a claim in the amount of $16,794,364 under the
$500,000,000 Revolving Credit Agreement with the Chase Manhattan
Bank as Administrative Agent the NatWest/Chase Claim) and

      (2) a claim in the amount of $80,153,169 on account of the
Guarantee by which HII guaranteed payment to NatWest of the
liabilities of certain of HII's affiliates (Beloit Walmsley
Limited, Harnischfeger Industries Limited, Harnischfeger (UK)
Limited, Joy Mining Machinery Limited and, in relation to
amounts incurred before March 30, 1998, Morris Mechanical
Handling Limited), with a limit on the amount recoverable of a
sum not exceeding Sterling 80,000,000 plus accruing interest,
costs and expenses.

The Westminster/Chase Claim was deemed timely filed and allowed
pursuant to a stipulation between HII and Chase Manhattan Bank,
on account of the Revolving Credit Agreement.

The Guarantee had an expiry date of August 31, 1999, but upon
two extensions, has been extended until June 30, 2002.

NatWest and HII's non-debtor affiliates subsequently executed
documentation for Modified Financing, the effectiveness of which
was contingent upon, among other things, the provision by HII of
a guarantee of the same in the form of a supplemental guarantee.

Accordingly, HII sought and obtained the Court's authority to
provide the Modified Financing Guarantee.

          Prior Stipulation re Westminster Claim

In its Thirty Second Omnibus Objection to Claims, HII asserted
an objection to the NatWest Claim in the amount of $96,947,533
on the grounds that the claim is allegedly contingent and not
allowable under Section 502(e)(1)(B) of the Bankruptcy Code.

HII and NatWest resolved the Claims Objection by means of a
Stipulation and Order.

The Prior Stipulation provided, among other things, that:

      (A) the Stipulated NatWest Claim, in the amount of
$80,153,169 or such other amount representing HII's obligations
to NatWest under the Guarantee would be deemed a contingent
claim against HII.

      (B) in the event of the occurrence of one or more
Triggering Events,

          (i) the designation of the Stipulated NatWest Claim as
              "contingent" would automatically, and without
              further Order of the Court or action by any party,
              be vacated, and be of no force or effect; and

         (ii) the Stipulated NatWest Claim would be deemed
              allowed in an amount equal to HII's obligations to
              NatWest under the Guarantee, as of the occurrence
              of such Triggering Event.

      (C) in the event the Court authorized HII to issue a
Modified Financing Guarantee, and HII issues such guarantee in
the form and substance required by the Modified Financing, and
conditioned upon the Modified Financing becoming effective,
then, notwithstanding anything to the contrary set forth in the
Prior Stipulation, the Stipulated NatWest Claim would be in the
amount of $80,153,169 or in such other amount representing HII's
obligations to NatWest under the Guarantee and/or the Modified
Financing Guarantee.

          The Third Amended Plan of Reorganization

After filing their Third Amended Joint Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code, in preparation for the
hearing on confirmation of the Plan, and in order to resolve any
remaining issues over the matter, the Debtors have requested
Barclays to enter into the current Stipulation.

In this Stipulation, the parties, with the intention to be
legally bound, but subject to approval of the Court, stipulated
and agreed that:

      "Upon the effective date of the Plan, the Stipulated
NatWest Claim (claim no. 6710) shall be deemed expunged in its
entirety. Notwithstanding the stipulation or anything to the
contrary set forth in the Bankmptcy Code, the Plan or in
applicable law, the Guarantee and Modified Financing Guanranty
sha11 remain in full force and effect as against New HII on and
subsequent to the effective date of the Plan and shall be fully
enforceable in accordance with their terms."

      HII shall use its best efforts to obtain (a) Court approval
of [the] Stipulation on or prior to the hearing on confirmation
of the Plan and (b) an order confirming the Plan which expressly
refers to [the current] Stipulation and is consistent in all
respects with this Stipulation.

      [The currrent] Stipulation shall not in any way be deemed
to modify or amend the Prior Stipulation, which shall remain in
full force and effect."

      [The] Stipulation shall be governed by and construed and
enforced in accordance with the bankruptcy laws of the United
Siates and the laws of the State of Delaware, without regard to
choice of law principles."

(Harnischfeger Bankruptcy News, Issue No. 42; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HUNGRY MINDS: Posts $8MM Loss & Confirms Plan to Sell Business
--------------------------------------------------------------
Details to Hungry Minds, Inc.'s (Nasdaq: HMIN) Second Quarter,
2001 report are as follows:

      -- The Company announced a 32% Q2 revenue decline versus
         year ago and net loss of $8.0 million ($0.54 per share);

      -- It is projected the Company will realize a 30%
         improvement to its previously announced $10.0 million
         cost savings;

      -- $43.8 million net revenue performance is $20.8 million
         lower than prior year and below management expectations.
         Tech and Consumer gross profit margins decline in Q2 to
         21.2% on a consolidated basis from 45.6% a year ago. The
         sequential decline from 36.5% margin in Q1 is due to a
         compounding effect of soft re-order patterns from major
         channels resulting from the continued erosion of the
         general economy and increased returns, pulping and fixed
         cost deleveraging. Several key accounts have informed
         the Company of significantly lower foot traffic in their
         stores, a decline in new store openings and an increase
         in store closings;

       - Q2 Technology and Consumer net revenue is $22.4 million
         and $21.4 million, respectively. (60% of the total
         decline from year ago comes from Tech titles.);

       - Net sales of Dummies Consumer titles increase 11% over
         prior year, based on brand extension in the travel
         category;

      -- SG&A declines by $6.4 million to $12.0 million.
         Improvements are related to the restructuring;

      -- Restructuring and impairment charges of $5.1 million are
         recorded during the quarter. $2.7 million of the charge
         relates to lease, leasehold improvements and severance
         expenses. The $2.4 million write-down of HMI intangibles
         is recorded as an impairment charge;

      -- Depreciation and amortization expense increases by $0.9
         million to $2.3 million. The increase is attributable to
         the HMI acquisition and leasehold improvements;

      -- Interest expense is $3.0 million. The $1.4 million
         increase is driven by the Company's higher debt balance
         and a market valuation loss on an interest rate
         derivative;

      -- EBITDA after restructuring and impairment charges for Q2
         is ($7.8) million, down from $10.9 million a year ago;

      -- Net cash from operations for the six months ended March
         31 increase by $8.0 million from ($7.1) million in Q2
         '00 to $0.9 million in Q2 `01;

      -- Daily cash management processes introduced and treasury
         management services moves to J. P. Morgan Chase & Co.;

      -- DSO (days sales outstanding) improved by 7 days to 97
         days at quarter end versus same period a year ago;

      -- The Company announced in an 8K filing on May 10, that it
         has agreed on the terms of a Forbearance and Amendment
         Agreement with its lenders. In addition, the Company
         confirmed its intention to sell the business with the
         assistance of Morgan Stanley & Co. Incorporated.


INTEGRATED HEALTH: Transfers Cheyenne Facility To Preferred Care
----------------------------------------------------------------
Debtor IHS-Cheyenne leases a 240 bed residential care facility
located at 2860 East Cheyenne Avenue, Las Vegas, Nevada. The
Facility exposes the Integrated Health Services, Inc. Debtors'
estates to an aggregate annual administrative liability in
excess of $1,100,000 according to the Debtors' evaluation.
Retaining the Facility will jeopardize the successful
reorganization of their estate, the Debtors told Judge Walrath.
Accordingly, the Debtors sought and obtained the Court's
authority for the transition of the Facility to Preferred Care
West, Inc., pursuant to sections 105(a), 363(b), 365(a) and
365(b) of the Bankruptcy Code and Rules 6004 and 6006 of the
Bankruptcy Rules. Specifically, the Debtors asked the Court to
approve a Lease Assignment and Operations Transfer Agreement by
and among IHS-Cheyenne, Preferred Care, Thomas Scott and North
Las Vegas ICF, L.L.C. (landlord).

The Transfer Agreement governs the transition of the Facility to
Preferred Care in accordance with applicable state and federal
regulations.

In addition, the Transfer Agreement governs the assumption and
rejection of the Lease. The Agreement provides that the Landlord
will accept an aggregate cure payment totaling $105,757.87 in
full satisfaction of all defaults under the Lease. The Debtors
submit that inasmuch as the Landlord has consented to the
Transfer Agreement, there is no need for Preferred Care to
provide adequate assurance of its future performance under the
Lease. Nevertheless, Preferred Care has access to available
funds sufficient to timely satisfy its future Lease obligations
and, if requested, can provide adequate assurance of
availability of sufficient funds, the Debtors submitted.

The Debtors believe that the transactions set forth in the
Transfer Agreement represent an exercise of sound business
judgment as the Transfer Agreement benefits the Debtors' estates
by eliminating the significant ongoing administrative liability
represented by the Facility. (Integrated Health Bankruptcy News,
Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900)


J.C. PENNEY: Fitch Lowers Notes' Rating To BB+ From BBB-
--------------------------------------------------------
Fitch has downgraded its rating of J. C. Penney Co., Inc.'s
notes and debentures from 'BBB-' to 'BB+'. J.C. Penney Funding
Corp.'s 4(2) commercial paper program is also downgraded from
'F3' to 'B'. At the same time, the ratings are removed from
Rating Watch Negative, where they were placed on Oct. 6, 2000.
Approximately $5.4 billion of debt is affected by the downgrade.
The Rating Outlook is Negative.

The downgrade reflects persistent operating weakness in Penney's
department store and Eckerd drugstore operations. The department
stores have struggled to gain sales traction in the increasingly
competitive middle market. At the same time, Eckerd's
profitability has been hampered by poor execution and pressure
from managed care in its growing drugstore operations.

Penney's credit measures continued to weaken in 2000. Coverage
as measured by EBITDAR (including discontinued operations but
before restructuring and other charges) to interest plus rents
declined in 2000 to 1.4 times (x) from 1.5x in 1999. Leverage as
measured by lease-adjusted debt-to-EBITDAR increased to 6.8x
from 5.9x. While these levels are weak for the rating category,
Fitch expects them to rebound over the medium term as debt
levels are reduced and profitability and cash flow improves.

Despite its soft operations, the 1999 sale of its credit card
receivables and improving free cash flow have strengthened
Penney's balance sheet and liquidity. Liquidity will be further
enhanced with the pending sale of the company's Direct Marketing
Services business, with the majority of the proceeds being used
to retire debt maturities over the next couple of years. This
will allow management time to implement its turnaround
strategies.

The new management team, under the direction of CEO Allen
Questrom, is taking positive steps to return the company to
profitable growth over the long term. These steps include the
recent centralization of the merchandising function at the
department stores, which should lead to improved assortments and
more timely movement of goods into the stores. In addition, both
the department stores and Eckerd are implementing new marketing
strategies, reducing expenses, and remodeling stores.

Nevertheless, the Negative Rating Outlook reflects a weakened
economic outlook, the competitive nature of the pharmacy and
department store sectors, and the risks associated with
implementing new strategies. It also reflects the expectation
that it could take an extended period of time for the company's
turnaround efforts to take hold.

Penney operates 1,111 J.C. Penney department stores in all 50
states, Puerto Rico and Mexico, and 49 Renner department stores
in Brazil. Penney also has a large catalog business and a
growing internet commerce effort. In addition, the company owns
2,640 Eckerd drugstores, which are located throughout the
Southeast, Sunbelt, and Northeast.


LA MANCHA: UAW Makes $9.75 Million Bid For Palm Springs Resort
--------------------------------------------------------------
Despite some union members' concern, the United Auto Workers
(UAW) has bid $9.75 million for a bankrupt California resort,
calling the move "a very sound business investment," according
to the Associated Press. Union officials wouldn't divulge their
plans for the 100-bedroom resort, but if the court accepts the
UAW's bid, the union would have 60 days to decide whether to
make the purchase. La Mancha Resort Village, located in Palm
Springs, Calif., is open but operating under chapter 11
protection. The Detroit Free Press reported that the union's bid
is below the $11.1 million asking price. It is unclear whether
the money to buy the resort would come from the UAW's pension
fund, general fund of $117 million or $841 million strike fund,
all of which are funded by members. (ABI World, May 16, 2001)


LODGIAN INC.: Amends Senior Secured Loan Credit Facility
--------------------------------------------------------
Lodgian, Inc. (NYSE: LOD) reported results for its first quarter
ended March 31, 2001.

                     2001 First Quarter Results

Total revenue for the first quarter 2001 was $114.8 million
compared to $138.4 million for the first quarter of 2000. The
17% decrease is primarily due to the disposition of 20 hotels in
the owned portfolio. RevPAR for the first quarter 2001, for
hotels owned as of March 31, 2001, on a same unit basis,
increased 0.7% as compared to the first quarter 2000. This
primarily was as a result of an increase in average daily rates
of 4.3%, partially offset by a 3.5% decline in occupancy. As
disclosed in the Company's Form 10-Q, RevPAR for the first
quarter 2001 for hotels owned during the first quarter 2001
declined by 0.8% compared to the first quarter 2000. This was
primarily as a result of a 3.9% decline in occupancy partially
offset by an increase in average daily rates of 3.4%. The
primary difference between these RevPAR statistics is the sale
of the Westin William Penn hotel in February 2001. After
adjusting for $3.1 million of unusual costs primarily related to
nonrecurring professional and legal fees and severance costs,
first quarter 2001 EBITDA was $19.7 million, a 26.5% decrease
compared to first quarter 2000 EBITDA on a same unit basis. This
decrease was primarily due to an aggregate $3.0 million impact
due to higher utility, property insurance, franchise fee and
property tax costs. Also contributing to this decrease were a
0.7% increase in direct operating expenses and higher corporate
overhead costs as a percentage of revenues. The Company realized
a gain on asset dispositions in first quarter 2001 of $24.4
million, principally due to the sale of the Westin William Penn
in February 2001. The Company incurred a $.07 per share loss for
the first quarter 2001 compared to a $.60 per share loss for the
first quarter 2000.

"Despite the challenging first quarter economic environment, a
number of profit enhancement initiatives have begun that will
help drive longer term improved performance," said Thomas Arasi,
Chief Executive Officer. "Overhead reductions on an annual run-
rate basis versus budget at both the corporate office and at the
properties have begun, marking progress in streamlining
operations. Plans for purchasing and energy management
initiatives are underway which should result in further
operational efficiencies going forward. Furthermore our
substantial, ongoing capital expenditure program will continue
to create value in our real estate assets and position the
company for revenue growth as economic conditions improve."

          Senior Secured Loan Credit Facility Amendment

On May 15, 2001, the Company reached an oral agreement to amend
its Senior Secured loan credit facility. The amendment is
expected to be executed in the next few days. The amendment will
modify various covenants and coverage ratios with which the
Company will be in compliance. Prior to the amendment, the
Company would have been in violation of two financial covenant
coverage ratios. The principal modifications of the amendment
are as follows: 1) the interest rate spread will increase
incrementally to a maximum of LIBOR plus 6.00% no later than
February 2002; 2) the interest rate spread will decrease 50
basis points for each aggregate $60.0 million of principal
reductions made subsequent to the amendment date as long as the
Company is in compliance with certain coverage ratios; and, 3)
four additional amortization payments of $7.5 million each are
due during 2002, which is consistent with the Company's plan to
reduce overall debt. The Company will pay an amendment fee of
$565,000 on the date of the amendment and an additional 75 basis
point fee will be due January 1, 2002, based on any outstanding
borrowings and commitments on that date. At May 15, 2001, the
Company had $202.0 million outstanding on its Senior Secured
loan credit facility. The Company is considering refinancing
options to pay off the Senior Secured loan credit facility. A
new Senior Vice-President of Finance has recently joined Lodgian
to focus on such refinancing options and new sources of capital.

                   2001 Outlook Update

Due to continued overall weakness in the current economic
environment and specific weakness in certain of the Company's
markets, Lodgian now anticipates that same unit RevPAR in 2001
will be flat to down approximately 1%. The Company currently
projects that EBITDA for 2001, after excluding an estimate of $6
million for unusual costs, will range from $103 to $108 million,
before considering any additional hotel dispositions. As a
result of reducing expectations for 2001, the Company has
reduced its total 2001 planned capital expenditures to $35
million. "A Vice-President of Asset Management was just hired to
focus on cost reduction opportunities in fixed charges such as
insurance, property taxes, and leases," said Thomas Arasi.
"Furthermore, asset management will optimize the returns on our
real estate assets through capital expenditure planning,
dispositions, product repositioning, and re- branding."

To date in 2001, the Company has sold three hotel properties for
gross proceeds of $66.8 million and used $56.3 million of these
proceeds to reduce debt. Lodgian continues to actively market a
number of properties for sale and recently engaged two
nationally recognized real estate brokers to assist the Company
in its disposition efforts. Management continues to believe that
the combination of its current cash position, cash flow from
operations, availability on the revolving credit facility, and
net proceeds from asset sales will provide sufficient liquidity
to fund the Company's operating, capital expenditure and debt
service obligations through December 31, 2001.

Thomas Arasi further stated, "Our proactive asset sale program,
efforts to reduce debt, overhead reductions, and asset
management initiatives designed to optimize real estate asset
values are consistent with progress toward our previously stated
strategy of preparing Lodgian for any one of a number of
possible strategic alternatives in the future. We remain
committed to laying the groundwork for strategic alternatives
and shareholder value creation as these opportunities present
themselves."

                        About Lodgian

Lodgian, Inc. owns a portfolio of 109 hotels with approximately
20,300 rooms in 32 states and Canada. The hotels are primarily
full service, providing food and beverage service, as well as
meeting facilities. Substantially all of Lodgian's hotels are
affiliated with nationally recognized hospitality brands such as
Holiday Inn, Crowne Plaza, Marriott, Radisson, Hilton and
Starwood. Lodgian's common shares are listed on the New York
Stock Exchange under the symbol "LOD". Lodgian is a component of
both the Russell 2000 Index, representing small cap stocks, and
the Russell 3000 Index, representing the broader market.


LOEWEN: Missouri Unit Seeks Authority To Sell Assets For $100K
--------------------------------------------------------------
Because the parties previously authorized by the Court for the
transaction failed to consummate it, Loewen Missouri, Inc. moved
the Court again, pursuant to The Loewen Group, Inc.'s
Disposition Program, for authority:

      (a) to sell the funeral home business and related assets at
Comstock Funeral Home (3202), 1122 Main Street, Unionville, MO
63565 to Newman Funeral Home, Inc., free of all liens, claims
and encumberances;

      (b) to assume and assign to the Purchaser the 7 executory
contracts and unexpired leases, pursuant to section 363 of the
Bankruptcy Code (Answering Service, Paging Service/Equipment
Lease, Custodial Agreements (2), Management Agreements (2),
Equipment Lease - Copier);

      (c) enter into all related agreements and transactions.

Loewen Missouri told Judge Walsh that after the previous
contemplated transaction fell through, they took the steps in
accordance with the Disposition Program again and ultimately
entered into the Asset Purchase Agreement with Newman Funeral
Home, Inc. (the previous Initial Bidder), whereby Newman agreed
to buy and the Debtors agreed to sell the property at a purchase
price of $100,000 less the amount paid by the Purchaser under
the Neweol Purchase Agreement. Certain accounts receivable,
transferable permits and goodwill relating to the businesses
will be transferred to the Purchaser.

The Purchaser paid the Selling Debtors a deposit of $5,000 upon
the execution of the Purchase Agreement and agreed to pay the
remainder of the Purchase Price at the closing. The Purchaser
agreed to assume all of the Selling Debtor's rights and
obligations under the Assignment Agreements.

In connection with the proposed sale of the Sale Locations,
Neweol would sell and the Initial Bidder would purchase certain
accounts receivable related to the Sale Locations pursuant to a
purchase agreement between Neweol and the Initial Bidder. The
amount of the Neweol Allocation will be determined immediately
prior to closing.

In accordance with the Net Asset Sale Proceeds Procedures, the
Debtors will use the proceeds generated to repay any outstanding
balances under the Replacement DIP Facility and deposit the net
proceeds into an account maintained by LGII at First Union
National Bank for investment, pending ultimate distribution on
court order. The Debtors advise that currently, there are no net
borrowings outstanding under the Replacement DIP Facility, so
this provision is not presently operative. The Debtors covenant
to comply with this provision to the extent that it becomes
operative in the future. Funds necessary to pay bona fide direct
costs of a sale may be paid from the account without further
order of the Court. The Debtors will deposit the net proceeds
into an account maintained by LGII at First Union National Bank
for investment, pending ultimate distribution on court order.

The Selling Debtor has determined that the sale of the Business
to the Purchaser on the terms set forth in the Purchase
Agreement is in the best interests of their estates and
creditors. (Loewen Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LTV CORPORATION: Resolves Contract Dispute With Peoples Energy
--------------------------------------------------------------
The LTV Corporation and Peoples Energy presented an Agreed Order
resolving the Motion by Peoples Energy to compel debtors to
assume its gas and power contracts. Peoples has calculated the
anticipated monthly usage under the Gas Agreement and the Power
Agreement, and will provide that figure to the Debtors, along
with supporting information reasonably necessary to verify the
calculations. The Debtors may notify Peoples within two business
days if they dispute the calculation of these estimated monthly
charges.

The Debtors will pay by wire transfer actual postpetition chares
for periods through January 31, 2001, no later than three
business days after receipt of the chares from Peoples.
Thereafter, the Debtors will pay one-half of the estimated
monthly chares on each of the Power Agreement and the Gas
Agreement on each bi-monthly payment date. In the event of any
dispute by the Debtors, an initial payment will be made within
two business days after the parties agree on the estimated
monthly charges. Payments will be made on the 15th day and the
last day of each month through termination or expiration of the
Gas Agreement or the Power Agreement, as applicable.

Peoples will provide information to the Debtors on the total
actual usage and billing charges for each month by a bill
ordinarily dated the 17th day of the following month. The
parties will then engage in a "true up" based on the actual
billing for the preceding month, less the payments previously
made by the Debtors for estimated usage for that month. If the
amount of the estimated monthly charges for that month is in
excess of the actual billing amount for the month, the Debtors
may reduce their next payment by the overpayment, or may require
Peoples to remit the overpayment amount to the Debtors by the
last day of the billing month. If the estimated monthly charges
are less than the actual billing amount for the month, the
Debtor will remit the under payment amount by the last day of
the billing month. If the Debtor fails to make any of the
scheduled payments, Peoples will give notice of the same to the
Debtors and their Committees. If no cure is had within five days
after notice, Peoples may suspend performance under the Power
Agreement and the Gas Agreement and will not be required to make
further deliveries.

The Debtors do not assume or reject either the Power Agreement
or the Gas Agreement, nor shall anything in the Agreed Order be
deemed to constitute any such assumption or rejection by the
Debtors. Judge Bodoh found that the objection by Keybank is moot
since the agreement between the Debtors and Peoples does not
grant Peoples a superpriority claim, and overrules the objection
of the Creditors' Committee. Upon review of the Agreed Order,
Judge Bodoh found that it is fair and reasonable, and signed it.
(LTV Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-00900)


MARINER: Court Allows Alice Frakes To File Late Proof of Claim
--------------------------------------------------------------
Mariner Post-Acute Network, Inc. has consented and obtained the
Court's authority to permit Alice Frakes, as Personal
Representative of the Estate of Pearl Cox, to file a late proof
of claim because Ms. Frakes stated that she never received
actual notice of the MPAN bankruptcy proceedings until after the
claims bar date.

Accordingly, Ms. Frakes will be permitted by the Court to file
her proof of claim within 30 days of the execution by the Court
of the Stipulation and Order. (Mariner Bankruptcy News, Issue
No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900)


MARTIN INDUSTRIES: AmSouth Bank Agrees To Extend Credit Facility
----------------------------------------------------------------
Martin Industries, Inc. (NASDAQ/NM:MTIN), a manufacturer of
premium gas fireplaces and barbecue grills, said it has reached
an agreement in principle with its primary lender, AmSouth Bank,
to amend and extend its credit facility until January 1, 2002
and to amend the line of credit and term loan under the credit
facility. In addition to the extension of the line of credit
through January 1, 2002, the proposed terms provide that up to
$11 million will be available under the revised line of credit
based upon the value from time to time of certain assets
securing the credit facility; a $1 million increase from the
credit currently available. The proposal also provides that the
principal payments under the Company's $2.4 million term loan
would be amortized and payable monthly instead of semi-annually.

The proposed amendment further contemplates a modification of
the interest rates and fees applicable to the loans and provides
for the amendment of certain financial covenants based upon
current financial projections of the Company.

AmSouth has agreed to an extension of the present credit
facility to June 15, 2001, in order to allow adequate time to
complete the required definitive documentation for the proposed
amended credit facility. There can be no assurance, however,
that the proposed amendments to the credit facility will be
completed by such date or, if necessary, further extensions
granted beyond June 15, 2001. In connection with the current
extension granted by AmSouth, the Company has agreed to an
increase in the interest rates of its current indebtedness to
the bank's prime lending rate plus one percent.

Jack Duncan, President and CEO, stated, "Based on our
conversations with customers, they have been hesitant to place
their orders with us until our financing situation was
clarified. We believe that the proposed extension and amendment
of our lending arrangement with AmSouth will provide the
necessary working capital during our heavy manufacturing period
to enable us to continue to manufacture our products and provide
our customers with high quality products in a timely fashion.
The amended credit facility should decrease the uncertainty our
customers have faced and allow them to once again place their
orders and their confidence with Martin." He went on to say,
"The length of the agreement provides the time necessary for us
to be in a better position to generate profits from our
measurably improved operations as well. Although we have not yet
completed the documentation necessary to effect the amendments
to our credit facility, we expect to do so prior to June 15,
2001."

Martin also announced financial results for the first quarter
ended March 31, 2001. The Company reported a net loss of $2.7
million, or $.34 per share, on net sales of $15.3 million. This
compares with a net loss of $2.0 million, or $.26 per share, on
$22.6 million in net sales for the first quarter of last year.
Martin Industries has two business segments. The decline in net
sales was primarily due to a 41% decline in gross sales of the
"Leisure and Other Products" business segment. This was caused
by a $5.3 million, or 47%, decrease in gross sales of
Broilmaster(R) premium barbecue grills, which was slightly
offset by improved sales of NuWay(TM) utility trailers. Part of
the decline in the level of sales for grills as compared to the
same period last year was attributed to timing of orders due, in
part, to customers' desire to reduce inventory levels. In
previous years, customers have generally purchased the majority
of their forecasted inventory requirements during the first
quarter under the Company's dating program. As an alternative to
the dating program, Martin has begun offering a new "Options"
program that combines its recently implemented on-demand
production capability with customers' desire to reduce their
inventory levels and better match order timing with consumer
demand.

The "Home Heating Products" segment declined in gross sales by
$2.2 million or 22%. Lower housing starts, due to inclement
weather in the South and Southeast, and the continued depression
in the manufactured home industry negatively impacted sales of
gas fireplaces and other hearth products. Sales of home heating
appliances also declined slightly during the quarter.

Jack Duncan commented, "Revenue restoration is our prime focus
to continue our plan to profitability now that we expect to
extend our financing through year end. We are assertively
addressing the marketplace to increase orders from existing
customers and continue to add new customers through a concerted
sales effort supported by our streamlined production and quality
customer support. We also continue to focus on costs, and given
the slow start to the year, we have recently completed another
reduction of fixed cost salaries. These reductions exceed $1
million on an annualized basis, excluding severance costs. This
effort, combined with our $10 million annualized cost reduction
in 2000, reduces our cost structure significantly when compared
with last year, helping to address our cash flow. The reduced
cost structure is realized in the lower decline of profits
relative to the significant decline in revenues this last
reporting period. Additionally, we recently implemented a
formal, highly-focused value engineering effort which is
beginning to be realized through reduced production costs."

"Our increased sales efforts appear to have produced a
noticeable increase in orders," he continued. "Despite
customers' previous doubts as to our financial capability,
orders have increased three fold in the last two weeks to an
average rate of $1.5 million per week. We have markedly ramped
up production capability to meet the sudden growth in demand. We
anticipate orders continuing to improve given the financial
stability offered by our proposed revised lending arrangement,
increased housing starts, and better weather. We intend to
continue to meet the challenge of demonstrating to our customers
the quality of our products and service in order to regain the
market share we have historically commanded."

Martin Industries designs, manufactures and sells high-end, pre-
engineered natural gas fireplaces and decorative gas logs and
gas heaters and appliances for commercial and residential new
construction and renovation markets. It also designs and
manufactures premium gas barbecue grills under the brand name
Broilmaster(R) for residential and small commercial use, and do-
it-yourself utility trailer kits known as NuWay(TM). Additional
information on Martin Industries and its products can be found
at its website: http://www.martinindustries.com


MATTRESS DISCOUNTERS: S&P Junks Corporate & Senior Debt Ratings
---------------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
unsecured debt ratings on Mattress Discounters Corp. to triple-
'C'-plus from single-'B' and its senior secured bank loan rating
to single-'B'-minus from single-'B'-plus. The outlook is
negative.

The downgrade is based on the company's continued weak operating
performance, constrained liquidity position, and violation of
financial covenants.

Sales in the first quarter ended March 31, 2001 decreased 17%
from the same period in the prior year. Significant comparable
store sales declines were reflected throughout the company's
markets with the Denver and Chicago markets showing declines of
55% and 30%, respectively. The Chicago market, which represents
about 23% of the company's store base, has experienced prolonged
negative same-stores sales. As a result, the company had
negative EBITDA of $.7 million and was not in compliance with
the total debt and interest coverage ratio covenants of its
senior credit facility. On May 14, 2001, the company reached an
agreement to amend the covenants. However, the company
anticipates that it will not be in compliance with the revised
financial covenants in the second quarter of 2001, and is
currently in discussions with its lenders to further amend the
agreement. In April 2001, the company drew down $18 million from
its revolving credit facility to finance current expenses
leaving only $2.0 million of availability.

Upper Marlboro, Md.-based Mattress Discounters is the leading
bedding retailer in the U.S., with 295 locations in the U.S. The
company sells both Sealy manufactured bedding accessories and
its own private label Comfort Source products.

                        Outlook: Negative

If Mattress Discounters is unable to generate positive cash flow
or amend its financial covenants, the ratings could be lowered.


NTEX INCORPORATED: Noteholders Endorse Plan of Arrangement
----------------------------------------------------------
Ntex Incorporated filed a Plan of Arrangement pursuant to The
Companies Creditors' Arrangement Act ("CCAA") to compromise its
11.5% Senior Notes due 2006 ("Old Senior Notes") and 1% Junior
Subordinated Notes due 2030 ("Old Junior Notes"). Ntex's
operating subsidiaries are not filing under the CCAA and the
Plan does not contemplate a compromise in respect of any other
class of debt, banking, trade debt, lease obligations or
executory contracts of Ntex or its operating subsidiaries.

Ntex advised that it has obtained the written support from the
requisite holders of both the Old Senior Notes and Old Junior
Notes necessary to approve the Plan subject to final
documentation. The Plan is subject to approval by the holders of
Old Senior Notes and Old Junior Notes at meetings of noteholders
which have been scheduled for June 26, 2001. Thereafter the Plan
is subject to the approval of the Ontario Supreme Court. Subject
to approval of the Plan, Ntex has also negotiated a
restructuring of its Senior Secured Facility with York Capital
Funding Inc.

Pursuant to the Plan, the US$35,778,000 of Old Senior Notes
including all accrued and unpaid interest thereon will be
discharged (the related indenture and guarantees will also be
discharged) and the holders thereof will receive in exchange
therefor (i) US$6,440,040 of new 7.5% Senior Notes due 2006 (the
"New Senior Notes"); and, (ii) US$29,337,960 of new 1%
Subordinated Notes due 2030 ("New Sub Notes"). The New Senior
Notes will also accrue interest compounded at the rate of 8% per
annum payable at maturity.

Pursuant to the Plan, the US$21,553,200 of Old Junior Notes
including all accrued and unpaid interest thereon will be
discharged (the related indenture will also be discharged) and
the holders thereof will receive in exchange therefor
US$21,776,414 of new 1% Junior Subordinated Notes due 2030 ("New
Junior Sub Notes").

The payment of interest on the New Senior Notes, New Junior
Notes and New Sub Notes will be subject to Ntex attaining
certain EBITDA thresholds (earnings before interest, taxes,
depreciation and amortization) ranging from $18 million to $22
million during the relevant 12 month period.

Subject to approval of the Plan, York has agreed to restructure
the terms of the Senior Secured Facility by: (i) reducing the
cash interest to 15% per annum from 25% per annum with an
additional 5% per annum accruing and added to the principal
thereof; and, (ii) deferring certain principal and interest
amounts.

Management believes the approval of the Plan will allow Ntex to
focus on continuing to consolidate and extend its niche market
positions within the North American textile market.

Further details with respect to the Plan are available on a
material change report filed via SEDAR (www.sedar.com)
Results for Fiscal Year Ended December 31, 2000
Net sales for the year decreased 3.5% to $151.1 million as
compared to $156.5 million in 1999 due to the continued weak
demand for apparel yarn, offset by moderate increases in towel
sales.

EBITDA for the year increased 29.7% to $17.9 million as compared
to $13.8 million in 1999 mainly due to lower cotton costs and
the absorption of fixed overheads from higher volumes at the
Towel Division.

Net income for the year was $14.4 million ($0.84 per share basic
and $0.79 fully diluted) as compared to a net loss of $10.4
million in 1999 ($0.84 loss per share basic and fully diluted).
The increase was mainly due to the gain on purchase of Senior
Notes completed in December 2000 and increased EBITDA as
discussed above.

      Results for the First Quarter Ended March 31, 2001

Net sales for the quarter decreased 10.2% to $33.2 million as
compared to $37.0 million in 2000 due to the continued weak
demand for apparel yarn, reduced towel shipments due to the
slowdown in the North American retail and hospitality sectors,
and the fact that several new large towel programs were launched
during the comparable 2000 period.

EBITDA for the quarter decreased 26.8% to $3.0 million as
compared to $4.1 million in 2000 mainly due to lower sales and
decreased gross margins resulting from lower levels of absorbed
fixed overheads.

Net loss for the quarter was $3.7 million ($0.28 loss per share
basic and diluted) as compared to a net loss of $2.0 million in
2000 ($0.17 loss per share basic and diluted).

Subsequent to the end of the quarter the Company is experiencing
increased demand for towel and yarn which is expected to improve
results for the remainder of 2001.

Ntex is a vertically integrated manufacturer of textile products
which manufactures textile products in the United States and
Canada for customers throughout North American.


ORIUS CORPORATION: S&P Places Low-B Credit Ratings On Watch
-----------------------------------------------------------
Standard & Poor's placed its ratings for Orius Corp. on
CreditWatch with negative implications. These are:

      * Corporate credit rating at B+
      * Senior secured debt at B+
      * Senior subordinated debt at B-

The rating action affects $150 million in subordinated notes,
and the firm's $425 million bank credit facility.

The CreditWatch placement reflects weaker-than-anticipated
performance, and the expectation that continued softness in
critical end markets will further erode financial flexibility
and credit protection measures. For the first quarter of 2001,
the company's pro forma EBITDA margin was 6.8%, well below Orius
management's March 15, 2001, estimate of approximately 10%, and
significantly below the 17.2% margin the company achieved over
last year's prior period. For fiscal 2001, the company currently
expects revenues of $700 million-$725 million, and EBITDA
margins in the 13%-15% area, compared with the firm's prior
estimates of approximately $800 million in revenues and 15%-16%
EBITDA margins.

As a result of the weak performance, and slower account
receivable collections, total debt (excluding the firm's junior
subordinated notes) to pro forma EBITDA has increased to 4.3
times (x) at March 31, 2001, from 3.3x a year ago, heightening
Standard & Poor's concerns that the company may fail to comply
with some financial covenants under its bank credit agreement in
the very near term.

West Palm Beach, Fla.-based Orius competes in the large and
highly fragmented telecommunications infrastructure service
industry. In the long term, the industry should benefit from
increasing demand for bandwidth, the trend of outsourcing
construction services, and the need for telecommunication
providers to continually maintain and replace facilities as
newer, more cost-efficient technologies are developed. However,
over the past couple of quarters, the industry has experienced a
sharp decline in project specific work, as many customers in the
telecommunications and cable markets have been unable to access
the capital markets, which has constrained their capital
spending plans. Relative to other rated telecommunications
infrastructure providers, Orius generates a higher percentage of
sales from project specific agreements, making the company
more vulnerable to softening market conditions.

Standard & Poor's will discuss with Orius management its plans
to maintain adequate financial flexibility, including potential
negotiations with its secured lenders, as well as its operating
strategies, before taking further rating actions.


PACIFIC GAS: Funding Energy Programs & Paying Pre-Petition Taxes
----------------------------------------------------------------
The U.S. Bankruptcy Court approved Pacific Gas and Electric
Company's motion to confirm that the funds collected by the
utility for Public Purpose Programs -- including energy
efficiency, low income, research and development and renewable
generation programs -- are not part of the bankruptcy estate and
can be used to honor pre-petition obligations incurred in
connection with the Public Purpose Programs. In addition the
court also allowed the utility to pay its pre-petition portion
of property taxes.

Pacific Gas and Electric Company will be able to immediately pay
for costs incurred in connection with the Public Purpose
Programs prior to April 6, the day it filed for protection under
Chapter 11 of the U.S. Bankruptcy Code. The utility owes
approximately $37 million to consumers who have requested
rebates and to contractors who have performed work in customers'
homes and businesses to make them more energy efficient. This
ruling ensures that the $260 million now in the energy
efficiency accounts will be fully available for payments for
these programs.

Pacific Gas and Electric Company operates the most extensive
energy efficiency program in the nation, and the continued
vitality of these programs will be a critically important part
of California's efforts to reduce the severity of rolling
blackouts this summer.

Pacific Gas and Electric Company administers energy efficiency
programs under the auspices of the California Public Utilities
Commission. The utility collects more than $200 million each
year from ratepayers, which are used to provide customers with
rebates for energy efficient appliances, lighting and equipment;
weatherization services for low-income customers; and consulting
services for residential and business customers. The programs
available include 1-2-3 Cashback, Residential Contractor
Program, Express Efficiency and Standard Performance Contract.
Pacific Gas and Electric Company's ratepayers also fund research
and development and renewable generation programs through the
California Energy Commission.

The U.S. Bankruptcy Court also authorized and directed Pacific
Gas and Electric Company to pay the pre-petition portion of its
property taxes. The company pays property taxes in 49 counties.
As a result of today's ruling, Pacific Gas and Electric Company
will be able to immediately pay up to $41.2 million, its portion
of property taxes prior to April 6, the day it filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. The
company's total property tax payment was $78.5 million, and it
paid the post-petition portion of $37.3 million on April 10.

Pacific Gas and Electric Company will continue to work with
county tax collectors to determine if the company is subject to
any late penalties.


PILLOWTEX: Closing Some Operations in Kannapolis And Columbus
-------------------------------------------------------------
Citing the continuing decline in market conditions and as part
of its restructuring under Chapter 11 bankruptcy, Pillowtex
Corporation (OTC: Bulletin Board: PTEXQ) said it will close a
sheet manufacturing plant in Kannapolis and a towel yarn
manufacturing operation in Columbus, Ga. In addition, the
Company plans to scale back towel production in Kannapolis.
The restructuring eliminates the jobs of approximately 590
employees in Kannapolis and approximately 190 employees in
Columbus. The Company began notifying affected employees on
Tuesday.

"We regret that economic conditions beyond our immediate control
have forced the difficult decision to close or scale back these
operations and are sensitive to the personal impact it will have
on our employees, their families and the surrounding
communities," said Bob Haase, Pillowtex's executive director for
operations. "However, we must ensure the future viability of our
overall business by taking these difficult, but deliberate
steps. We believe that the actions we are taking will allow us
to service our customers more effectively and, in turn, improve
the Company's viability in the very competitive home textiles
industry."

Haase said the restructuring eliminates excess manufacturing
capacity brought about by declining towel and sheet sales and
will allow the Company to better align its production capacity
to sales. For example, he said, net sales were down more than 16
percent in this year's first quarter as compared to the first
quarter of 2000.

"Since last November, employees have undergone frequent periods
of temporary layoffs. This reorganization should allow the
Company to operate on more predictable schedules," Haase said.

A sheet manufacturing facility, Plant 4 in Kannapolis will be
closed by July 15, 2001. The plant employs approximately 200
management and hourly employees and manufactures low thread-
count muslin and percale sheeting fabric. Production of certain
goods currently manufactured at Plant 4 will move to the
Company's remaining sheet greige facility, Plant 16, in nearby
China Grove. The building housing Plant 4 will be marketed for
sale.

Restructuring at Plant 1 will affect approximately 390 hourly
and management employees in the #1 weave department and portions
of towel wet finishing, towel fabrication, and towel
distribution. The Company will phase out the looms operating in
the #1 weave department over the next several months. The
Company will continue producing bath towels, hand towels and
washcloths in the #2 and #6 weave departments, Plant 1's more
modern towel weaving operations. After the restructuring, 3,500
employees will remain at Plant 1.

As part of the restructuring, the yarn department in Columbus,
Ga. will close by July 15, 2001. The department employs
approximately 190 persons and produces yarn for towel weaving.
Production of certain yarn currently manufactured at Columbus
will move to the Company's towel yarn manufacturing department
in Kannapolis and to its yarn manufacturing plant in Tarboro,
N.C. The Company will continue to operate the towel warping,
bleaching and dyeing departments in Columbus. The Company's
towel manufacturing operations in neighboring Phenix City, Ala.
will not be affected. After the restructuring, 1,150 employees
will remain at Columbus and Phenix City.

Pillowtex is working with employees affected by the closures and
restructuring. "The people affected by this action are good
workers, and the Company greatly appreciates their efforts. We
will do all we can to ease this difficult transition in their
lives," said Don Mallo, vice president, human resources. "Our
goal is to make certain that all employees impacted have
immediate access to information they and their families need
during this transition period."

To assist employees affected by the closings, the Company is
working closely with the North Carolina Employment Security
Commission and the Georgia Department of Labor which intends to
have representatives on-site at the affected facilities to
provide direct access to claims filing, information about
possible job opportunities, job retraining and other
unemployment benefits. Pillowtex human resources managers at
each location will help with questions concerning company
benefits.

Employees at the Kannapolis and Columbus locations are
represented by the Union of Needletrades, Industrial and Textile
Employees (UNITE). The Company and UNITE will begin negotiations
to determine other applicable benefits including the possibility
of hiring at neighboring Pillowtex facilities for the affected
employees.

Mallo said the Company intends to work with local government and
economic development commissions in Kannapolis and Columbus to
minimize the impact of the job losses to the communities.
Pillowtex Corporation, with corporate offices in Kannapolis,
N.C., is one of America's leading producers of household
textiles including towels, sheets, rugs, blankets, pillows,
mattress pads, feather beds, comforters and decorative bedroom
and bath accessories. The Company's brands include Cannon,
Fieldcrest, Royal Velvet, Charisma and private labels. The
Company filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on November 14, 2000.
Pillowtex currently employs approximately 12,200 people in its
network of manufacturing and distribution facilities in the
United States and Canada.


PSINET INC.: Tells SEC Form 10-Q Will Be Late
---------------------------------------------
PSINet Inc. (OTCBB:PSIX) filed a Form 12b-25 with the Securities
and Exchange Commission indicating that it will not be able to
file its Form 10-Q for the quarter ended March 31, 2001 within
the prescribed time period.

The Company, at this time, does not expect to file its Form 10-Q
within the 5-day extension period permitted under Rule 12b-25.
As a result of the Company's inability to comply with the
reporting requirements under the Securities Exchange Act of
1934, its securities will no longer be eligible for resale under
Rule 144 of the Securities Act of 1933.

In addition, holders of the Company's common stock, Series D
preferred stock and PSINet Consulting Solutions Holdings, Inc.'s
2.94% convertible subordinated notes may no longer use the
Company's registration statements on Form S-3 for resales or
conversions of such securities.

PSINet previously announced that it is likely that its common
stock and preferred stock will have no value. As previously
announced, the Company's cash, cash equivalents, short-term
investments and marketable securities are not expected to be
sufficient to meet the Company's anticipated cash needs and the
Board of Directors of the Company has formed a restructuring
committee in order to more effectively facilitate a
reorganization of the Company's business.

The Company and its advisors continue to analyze and pursue
certain financial and strategic alternatives, including the
possible sale of all or a portion of the Company, while also
exploring alternatives to restructure the Company's obligations
to its bondholders and other creditors.

However, there can be no assurance that one or more of these
alternatives can be successfully implemented and no assurance
that, even if any of such alternatives are implemented, the
Company will not run out of cash. These efforts are likely to
involve reorganization under the federal bankruptcy code.

PSINet also announced that its Board of Directors did not
declare the May 15, 2001 quarterly dividend of $14.4 million to
holders of its Series D preferred stock. At the time of issuance
of the Series D preferred stock, a deposit account was
established with sufficient funds to make quarterly payments
through February 15, 2001.

Accordingly, prior payments on the Series D preferred stock were
made from this deposit account. If dividends on the Series D
preferred stock are in arrears for six quarterly periods,
holders of the Series D preferred stock will be entitled to
elect two directors to the Company's Board of Directors at the
Company's next annual or special meeting. Such voting rights
would continue until the divided arrearage is paid in full.

At the time of issuance of the Company's Series C preferred
stock, a similar deposit account was established with sufficient
funds to make quarterly payments through May 15, 2002. A
quarterly payment of $3.9 million was paid by the deposit agent
out of this account on May 15, 2001 to the holders of the Series
C preferred stock in accordance with the terms of the related
deposit agreement. The remaining balance in this deposit
account, after the May 15, 2001 payment, is $15.4 million.

Headquartered in Ashburn, Virginia, PSINet Inc. is a leading
provider of Internet and IT solutions offering flex hosting
solutions, global eCommerce infrastructure, end-to-end IT
solutions and a full suite of retail and wholesale Internet
services through wholly-owned PSINet subsidiaries.
Services are provided on PSINet-owned and operated fiber, web
hosting and switching facilities, currently providing direct
access in more than 900 metropolitan areas in 27 countries on
five continents. PSINet information can be obtained by e-mail at
info@psi.com or by calling in the U.S. 800/799-0676.


REGAL CINEMAS: Creditors Demand Payment For $1.8 Billion Debt
-------------------------------------------------------------
Regal Cinemas Inc. disclosed that its senior credit line lenders
and its outstanding note holders have demanded that the company
pay its outstanding debt of $1.8 billion, according to Dow
Jones. Of the $1.8 billion, $85.2 million of that has accrued in
unpaid interest. In the company's quarterly report filed Monday
with the Securities and Exchange Commission, Regal said that it
couldn't fund or refinance the debt and interest. Regal hasn't
complied with certain covenants since the fourth quarter and as
a result is in default on the bank line and notes. The payment
acceleration was prompted when Regal defaulted on an interest
payment that was due at the end of March. The company has hired
financial advisers and is evaluating restructuring alternatives,
including a potential recapitalization or bankruptcy. (ABI
World, May 16, 2001)


RITE AID: Expects To Close $3.0 Billion Refinancing Deal in Q2
--------------------------------------------------------------
Rite Aid Corporation (NYSE, PSE:RAD) announced the details of a
comprehensive $3.0 billion refinancing package that includes a
commitment for a new $1.9 billion senior secured credit facility
fully underwritten by Citibank NA, J.P. Morgan Chase & Co.,
Credit Suisse First Boston Corporation and Fleet Retail Finance,
Inc. Rite Aid said that upon completion of the planned
transactions, scheduled to close during the company's second
fiscal quarter, the company will have significantly reduced its
debt and the amount of its debt maturing prior to March 2005.

The closing of the new credit facility is subject to the
satisfaction of customary closing conditions and the issuance by
Rite Aid of approximately $1.05 billion in new debt or equity
securities, of which $527 million has already been committed or
arranged.

The company plans to raise, at a minimum, the additional $523
million by issuing equity and fixed income securities and
through real estate mortgage financings in transactions which
will close simultaneously with, and which will be conditioned
upon, the closing of the new credit facility.

The new credit facility will be secured by inventory, accounts
receivable and certain other assets owned by Rite Aid
subsidiaries. The facility will be used to repay the company's
first and second lien debt, pay expenses associated with the
planned refinancing and for general working capital purposes.

Bob Miller, chairman and chief executive officer of Rite Aid,
said: "We are excited about the support for Rite Aid and its
turnaround plan that these refinancing commitments represent and
are confident we will complete these transactions this summer.
This refinancing will eliminate uncertainty about Rite Aid and
its 2002 debt obligations and will allow us to focus on
continuing to improve same-store sales, cash flow and Rite Aid's
overall financial performance."

Included in the $527 million in new debt and equity securities
that has already been committed is a $149 million private
placement comprised of 23 million shares of common stock
committed on March 22, 2001 at $5.50 per share and 3.5 million
shares of common stock committed on May 2, 2001 at $6.50 per
share.

The closing of this equity investment will take place
simultaneously with, and is contingent upon, the completion of
the new credit facility.

The company also said that one of the holders has committed to
exchange $152 million of the company's 10.5% Senior Secured
Notes due 2002 for $152 million of new 12.5% Senior Secured
Notes maturing in 2006. The new notes will be secured by a
second lien on the collateral securing the new credit facility.
In connection with the exchange, the holder will receive five-
year warrants to purchase 3.0 million shares of common stock at
$6.00 per share. The exchange will take place simultaneously
with, and is contingent upon, the closing of the new credit
facility.

Rite Aid said that also included in the $527 million that has
already been committed are recently completed or contracted
private exchanges of its common stock for $226.2 million of its
bank debt and 10.5% Senior Secured Notes due 2002.
Once the refinancing transactions are completed, Rite Aid's
remaining debt due before March 2005 will be $152.0 million of
the company's 5.25% Convertible Subordinated Notes due 2002,
$107.8 million of its 6.00% Dealer Remarketable Securities due
2003, $259.2 million of its 10.5% Senior Secured Notes due 2002
and amortization of the new credit facility.

The company said it expects to use internally generated funds to
retire both the 5.25% notes and the dealer remarketable
securities at maturity and to meet its amortization payments
under the new credit facility. It also said that funds to repay
the 10.5% notes at maturity are included in the new credit
facility.

The company is being advised on the refinancing by Salomon Smith
Barney Inc., J.P. Morgan Chase & Co. and Credit Suisse First
Boston Corporation.

Rite Aid said that the commitment letter for the new credit
facility will be filed in its Form 10-K with the Securities and
Exchange Commission.

The debt and equity securities to be offered by the company will
not be registered under the Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent
registration or an applicable exemption from such registration
requirements.

Rite Aid Corporation is one of the nation's leading drugstore
chains with annual revenues of more than $14 billion and more
than 3,600 stores in 30 states and the District of Columbia.
Information about Rite Aid, including corporate background and
press releases, is available through the company's website at
www.riteaid.com.


TANDYCRAFTS: Files Chapter 11 Petition in Wilmington
----------------------------------------------------
Tandycrafts Inc. and two of its affiliates filed for chapter 11
bankruptcy protection in the U.S. Bankruptcy Court in
Wilmington, Del., listing $64.5 million in assets and $56.3
million in liabilities, according to Dow Jones. The Fort Worth,
Texas-based maker of frames and other wall decor products
estimated that it had between 200 and 999 creditors, but also
said that funds would be available for distribution to unsecured
creditors.

The company had extended a forbearance agreement with its
lenders through Tuesday after failing to make an interest
payment due to lenders on May 1. On Friday, Tandycrafts said it
wouldn't seek a review of the New York Stock Exchange's decision
to delist its stock. The company said its shares would trade on
the pink sheets. According to the petition, there are 12.9
million common shares outstanding, held by 6,500 holders. (ABI
World, May 16, 2001)


TANDYCRAFTS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Tandycrafts, Inc.
              1400 Everman Parkway
              Forth Worth, TX 76140

Debtor affiliates filing separate chapter 11 petitions:

              Tandyarts, Inc.
              TAC Holdings

Type of Business: Manufacturer and marketer of frames, framed
                   art, mirrors, bulletin boards, and other wall
                   d‚cor products

Chapter 11 Petition Date: May 15, 2001

Court: District of Delaware

Bankruptcy Case Nos.: 01-01764, 01-01766, 01-01767

Debtors' Counsel: Allan B. Hayman, Esq.
                   Scott K. Rutsky, Esq
                   Glenn S. Walter, Esq.
                   Proskauer Rose LLP
                   1585 Broadway
                   New York, New York 10036
                   (212) 969-3000

                         and

                   Mark E. Felger, Esq.
                   Cozen and O'Connor
                   Chase Manhattan Centre
                   1201 North Market Street
                   Suite 1400
                   Wilmington, DE 19801
                   (302) 295-2000

Total Assets: $64,559,000

Total Debts: $56,370,000

Consolidated List of Debtors' 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim     Claim Amount
------                        ---------------     ------------
Cadwalader, Wickersham         Legal Service        $390,000
& Taft
Dennis Block
General Post Office
P.O Box 5629
New York, NY 10087-5929
(212) 504-6000

ITT Gilfillan                  Material Sales       $359,200
Gil McDougal
7821 Orion Avenue
Van Nuys, CA 91409
(818) 901-2565

Emafyl                         Material Sales       $330,565
Sharon Simons
122-150 Hackney Road
London, England E7 7QS
11.44.207.739.3744

Crescent/US Mat                Material Sales       $276,228
Alisa Boss
100 W. Willow Road
P.O. Box XD
Wheeling, IL 60090

Peerless Coatings, Inc.        Material Sales       $202,670

Stone Container                Material Sales       $199,069

Steel City Lumber Co           Material Sales       $193,880

U-Jin Chemical USA             Material Sales       $177,920

Lone Star Chemical             Material Sales       $165,607

Northwest Hardwoods            Material Sales       $164,132

Alpha Packaging                Material Sales       $150,052

James D. Morgan Co., Inc.      Material Sales       $133,252

North American Forest          Material Sales       $128,677
Products

Paul P. Bellenger Lumber Co.   Material Sales       $116,229

AFG Industries                 Material Sales       $111,041

Coastal Lumber                 Material Sales       $109,707

New Cargo Furniture, Inc.      Contract              $98,796

Continental Timber Company     Material Sales        $97,321

Radioshack Corporation         Indemnification       Unknown
(f/k/a Tandy Corporation)

Huntington Pacific             Environmental         Unknown
Ceramics, Inc.


THERMADYNE HOLDINGS: Credit Ratings Fall To Junk Levels
-------------------------------------------------------
Standard & Poor's lowered its ratings on Thermadyne Holdings
Corp. and related entities (see list below). At the same time,
all ratings were placed on CreditWatch with negative
implications. About $792 million of debt and credit facilities
are affected.

As of March 31, 2001, the company was in violation of certain
financial covenants associated with its bank credit facility.
The company was able to obtain waivers from its banks until May
23, 2001. However, the waivers limited the company's ability to
pay interest associated with its 10.75% subordinated notes due
2003. As a result, the company was unable to make its May 1,
2001, interest payment associated with these notes and is now in
the 30-day cure period. The company has indicated that it will
not make its interest payment associated with these notes at the
expiration of the 30-day cure period, which will result in a
default. In addition, the company has approximately $14 million
in interest payments (including the subordinated notes)
associated with its various debt obligations due within the next
60 days.

St. Louis, Mo.-Thermadyne occupies solid market positions in the
manufacture of a wide variety of cutting and welding equipment
and supplies. Markets are mature, cyclical, and subject to
intense pricing pressures.

Standard & Poor's will continue to monitor the company's
financing plans. If the company's financial initiatives result
in bondholder impairment or if the company fails to make its
interest payments within the 30-day cure period, ratings will be
lowered to 'D', Standard & Poor's said.

            Ratings Lowered And Placed On Credit Watch
                  With Negative Implications

                                   To           From
Thermadyne Holdings Corp.
      Corporate credit rating      CC           B
      Senior unsecured debt        C            CCC+
      Subordinated debt            C            CCC+

Thermadyne MFG. LLC
      Corporate credit rating      CC           B
      Senior secured debt          CC           B

Thermadyne MFG. LLC &
Thermadyne Capital Corp.
      Corporate credit rating      CC           B
      Subordinated debt            C            CCC+


TRI VALLEY: Completes Final Sale Of Assets
------------------------------------------
Goldsmith Agio Helms, the nation's leading privately-held, sell-
side, middle-market investment banking firm, announced the
completed sale of Tri Valley Growers' tomato business (including
the Red Pack, Tuttorosso and Sacramento brands) to Red Gold,
Inc. The sale of the tomato business represents the third and
final deal in the three-part transaction encompassing the
overall sale of Tri Valley Growers.

As previously announced, Del Monte Foods Co. acquired the S&W
brand and related business, and John Hancock Life Insurance Co.
acquired Tri Valley's fruit business. Goldsmith Agio Helms
represented Tri Valley Growers in all three of these important
transactions.

Kevin G. Jach, Managing Director and Partner of Goldsmith Agio
Helms, commented, "These three transactions represent the
continuing consolidation in the food industry, as well as the
successful conclusion of what has been a very complex sale
process."

Red Gold, Inc. is a third generation, family owned business
located in Indiana. The company was founded in 1942 and sells
and markets tomato products throughout the Midwestern and
Eastern United States.

Tri Valley Growers was formerly headquartered in San Ramon,
California. The company was a California-based cooperative that
processed fruits and vegetables, with pre-bankruptcy revenues of
$800 million.

Del Monte Foods Co., headquartered in San Francisco, California,
is the largest producer and distributor of canned vegetables and
canned fruit in the United States, with net sales of $1.5
billion in fiscal year 2000.

John Hancock Life Insurance Co., headquartered in Boston,
Massachusetts, is one of the largest lenders to California's
food processing industry. John Hancock will operate the Tri
Valley fruit business in a newly created company called
Signature Fruit.

Goldsmith Agio Helms is the nation's leading independent
investment banking firm providing M&A advisory services to
sellers of middle market businesses. The firm represents public
and private companies, with values in the $25 million to $500
million range, in mergers, sales, joint ventures, divestitures,
recapitalizations and restructurings. In 1999 and 2000, the firm
completed 76 transactions, at purchase price multiples well in
excess of industry norms. Goldsmith Agio Helms has 55
professionals with offices in Minneapolis, New York, Chicago,
Los Angeles, and Naples, Florida.


UNIFORET INC.: Gets 45-Day Extension To File Plan of Arrangement
----------------------------------------------------------------
UNIFORET INC. and its subsidiaries, Uniforet Scierie-Pate Inc.
and Foresterie Port-Cartier Inc. have obtained from the Superior
Court of Montreal an order extending for an additional period of
45 days the delay to present a plan of arrangement under the
"Companies' Creditors Arrangement Act" which will set out the
terms of the restructuring of their debts and obligations.

The Company intends to keep on its current operations and its
customers are not affected by the Court order. Suppliers who
will provide goods and services necessary for the operations of
the Company will continue to be paid in the normal course of
business.

Uniforet Inc. is an integrated forest products company which
manufactures softwood lumber and bleached chemi-thermomechanical
pulp. It carries on its business through its subsidiaries
located in Port-Cartier (pulp mill and sawmill) and in the
Peribonka area in Quebec (sawmill). Uniforet Inc.'s securities
are listed on The Toronto Stock Exchange under the trading
symbol UNF.A, for the Class A Subordinate Voting Shares, and
under the trading symbol UNF.DB, for the convertible debentures.


US INTERACTIVE: Securities Kicked Off From Nasdaq
-------------------------------------------------
U.S. Interactive, Inc. (Nasdaq:USIT) announced that the
company's securities have been delisted from the Nasdaq National
Market. The Nasdaq action to delist was prompted by a Nasdaq
Staff decision that concluded that US Interactive has not met
all the requirements for continued listing of its securities.

             About U.S. Interactive, Inc.

US Interactive(R) (Nasdaq:USIT) is an Internet professional
services company that provides customer management solutions to
the communications industry.


W.R. GRACE: Rejecting Six Burdensome Lease Agreements
-----------------------------------------------------
The W. R. Grace & Co. Debtors are party to six non-residential
real property leases for facilities they can't use:

      Location                       Landlord
      --------                       --------
      495 N. Semoran Blvd.           Pat Legan
      Winter Park, Florida

      4691 Transit Road              Jay B. Birnbaum and
      Williamsville, New York        Nathan Lewinger

      23829 S. Banning Blvd.         Watson Land Co.
      Carson, California

      326 Main Street                KAM Holdings, Inc.,
      Cedartown, Georgia             dba Pinata, Inc.

      1029 280 Bypass                Gulf Pacific America, Inc.
      Phenix City, Alabama

      14510 Memorial Drive           Hornberger Bros. Properties,
      Houston, Texas                 Inc.

The Debtors told Judge Farnan that the facilities are empty and
they've returned the keys to the facilities to the landlords.
Accordingly, pursuant to 11 U.S.C. Sec. 365(a), the Debtors
sought authority to reject these burdensome leases. The Debtors
sought further authority to reject Guaranties related to the
Cedartown, Houston and Phenix City property Lease Agreements.
(W.R. Grace Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WARNACO GROUP: Obtains Waiver of Certain Debt Covenants
-------------------------------------------------------
The Warnaco Group, Inc. (NYSE: WAC) announced that it has
received a waiver of certain financial covenants from its
lenders through June 15, 2001, which will be filed tomorrow with
the Securities and Exchange Commission. To avoid a possible
default after expiration of the waiver, Warnaco would require a
further waiver or amendment to the covenants. Warnaco is
currently exploring all of its alternatives which, as previously
reported, include, among other things, the refinancing or
restructuring of its existing debt and asset sales. There can be
no assurance that the Company will be able to refinance or
restructure its debt or engage in asset sales.

The Warnaco Group, Inc., headquartered in New York, is a leading
manufacturer of intimate apparel, menswear, jeanswear, swimwear,
men's and women's sportswear, better dresses, fragrances and
accessories sold under such brands as Warner's(R), Olga(R), Van
Raalte(R), Lejaby(R), Weight Watchers(R), Bodyslimmers(R),
Izka(R), Chaps by Ralph Lauren(R), Calvin Klein(R) men's,
women's, and children's underwear, men's accessories, and men's,
women's, junior women's and children's jeans,
Speedo(R)/Authentic Fitness(R) men's, women's and children's
swimwear, sportswear and swimwear accessories, Polo by Ralph
Lauren(R) women's and girls' swimwear, Oscar de la Renta(R),
Anne Cole Collection(R), Cole of California(R) and Catalina(R)
swimwear, A.B.S. (R) women's sportswear and better dresses and
Penhaligon's(R) fragrances and accessories.

A report on Form 8-K containing the waiver will be filed with
the Securities and Exchange Commission.


WOMEN.COM: Says Capital Is Insufficient To Sustain Operations
-------------------------------------------------------------
Women.com Networks Inc. has suffered recurring losses from
operations and has an accumulated deficit of $214.9 million.
Women.com has entered into a definitive agreement whereby
iVillage, Inc., operator of the iVillage network, contingent
upon the satisfaction of certain conditions, will acquire all of
the outstanding shares of Women.com. If the sale to iVillage
does not occur, Women.com will need to raise additional
capital to fund their 2001 operations and may have to reduce
certain discretionary spending and scale back their operations.
There can be no assurance that the sale to iVillage will occur
or that Women.com will be successful in raising additional
funding if the sale does not occur.

Women.com has incurred significant net losses and negative cash
flows from operations since its inception. The Company expects
to incur significant operating losses and negative cash flows
from operations for at least the next several years. Women.com's
continuation as a going concern is dependent on its ability to
obtain additional financing to meet its obligations.

Revenues were $6.4 million for the three months ended March 31,
2001, a 55% decrease compared to the same period in 2000. The
decrease in revenues was primarily due to a significant decline
in the internet advertising market. Advertising and sponsorship
revenues were $4.3 million for the three months ended March 31,
2001, a 61% decrease over the corresponding period in 2000.

Revenues for the three months ended March 31, 2000 also included
$1.6 million of production and hosting fees related to the
launch of eharlequin.com in February 2000; there were no such
production and hosting fees in 2001.

The Company believes that its existing cash and cash equivalents
may not be sufficient to meet its operating and capital
requirements at its currently anticipated level of operations
beyond the end of the second quarter of 2001. While the Company
may take appropriate actions to change its proposed operations
to stretch its current cash positions beyond the end of the
second quarter of 2001, additional capital will be necessary to
fund operations at currently anticipated levels beyond the
second quarter of 2001. There can be no assurance that the
Company will be able to obtain additional funds, on acceptable
terms or at all. If it cannot raise additional capital on
acceptable terms, it will not be able to continue the present
level of operations and will have to scale back business and may
not be able to further take advantage of future opportunities or
respond to competitive pressures, any of which could have a
material adverse effect on its business and results of
operations.

These conditions raise substantial doubt about Women.com's
ability to continue as a going concern.


WORLD KITCHEN: Posts $44.9 Million Net Loss For Q1 2001
-------------------------------------------------------
WKI Holding Company, Inc., which operates as World Kitchen,
Inc., announced results for its first fiscal quarter ended April
1, 2001.

Net loss for the quarter was $44.9 million, which includes a
$22.1 million charge related to the company's previously
announced restructuring plan. Year 2000 first quarter net loss
was $10.2 million.

Net sales for the quarter were $170.8 million, compared to year
2000 first quarter net sales of $187.9 million. The net sales
decline of $17.1 million generally reflects a slower retail
economy in 2001 versus 2000, as well as the Company's exit of
its cleaning products business.

Offsetting some of the sales shortfall were the successful
introduction of Martha Stewart rangetop and kitchenware items at
K-Mart and successful new product launches including the
CorningWare(R) Tableware line, Chicago Cutlery(R), OXO SteeL(TM)
line of stainless steel kitchen tools and utensils, and OXO Good
Grips(TM) enamel tea kettles, garden tools and cutlery products.
Gross profit for the first quarter of 2001 was $48.6 million, a
decrease of $12.0 million when compared to first quarter 2000
gross profit of $60.6 million. As a percentage of net sales,
gross profit decreased to 28.4% in the first quarter of 2001
from 32.2% in the first quarter of 2000.

The decrease is primarily attributable to the Company's decision
to temporarily idle certain of its manufacturing facilities in
the first quarter of 2001 to reduce inventories and
manufacturing costs. This action led to higher unabsorbed fixed
manufacturing costs as a percentage of net sales, which were
expensed in the first quarter. In addition, in the first quarter
of 2001, the Company discontinued a significant number of its
stock-keeping units (SKUs) throughout all of its product lines
to reduce inventory and warehousing costs and to improve
customer service. A portion of these discontinued products were
liquidated in the first quarter of 2001.

EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) was $9.2 million in the first quarter of 2001,
excluding a $22.1 million charge for restructuring and
rationalization. First quarter 2000 EBITDA was $17.1 million and
excluded $4.6 million in integration related expenses.

"While not yet where we want to be long-term, given the current
economic conditions, these results are in line with our
expectations for the first quarter," said Steven G. Lamb, World
Kitchen president & CEO. "We are making good progress in
implementing the previously announced restructuring plan. Once
complete, these programs will positively impact our cost
structure and will enable World Kitchen to set new performance
standards for customer service in the housewares industry,
driving future business growth and improved financial
performance."

             Restructuring Implementation Underway

On April 3, 2001, World Kitchen announced a plan to restructure
several aspects of the Company's manufacturing and distribution
operations in order to reduce costs and improve customer
service. This measure will result in a 2001 restructuring charge
of approximately $35.0 million. First quarter 2001 charges for
this restructuring and rationalization program were $22.1
million. The previously announced program includes three major
components:

Exit from the Martinsburg, West Virginia facility by the end of
the first quarter 2002, where the CorningWare(R) and Visions(R)
product lines are produced. The Company remains committed to
these brands and is evaluating several alternative sources in
order to ensure future product supply.

Consolidation of distribution operations at Waynesboro, Virginia
into World Kitchen's existing distribution centers at Monee,
Illinois and Greencastle, Pennsylvania. Waynesboro is expected
to cease operations during the first quarter of 2002.

Significant restructuring of metal bakeware manufacturing at
Massillon, Ohio to reduce costs.

On April 12, 2001, the Company announced the closure of its
cutlery facility in Wauconda, Illinois as an additional step in
the Company's restructuring plan. The Company expects to cease
manufacturing at the facility and re-source its cutlery product
line by year-end 2001. This decision will result in an
additional charge of approximately $5.0 million, which will be
recorded in the second quarter of 2001.

World Kitchen's principal products are glass, glass ceramic and
metal cookware, bakeware, kitchenware, tabletop products and
cutlery sold under well-known brands including CorningWare,
Pyrex, Corelle, Visions, Revere, EKCO, Baker's Secret, Chicago
Cutlery, OXO and Grilla Gear. World Kitchen has been an
affiliate of Borden, Inc. and a member of the Borden Family of
Companies since April 1998.

The Company currently has major manufacturing and distribution
operations in the United States, Canada, United Kingdom, South
America and Asia-Pacific regions. Additional information can be
found at: www.worldkitchen.com.


ZAMIAS SERVICES: Files for Chapter 11 Protection in Pittsburgh
--------------------------------------------------------------
Zamias Services Inc. and four limited partnerships controlled by
the Zamias family filed for chapter 11 protection on Friday in
the U.S. Bankruptcy Court in Pittsburgh, according to the
Associated Press. The Johnstown, Pa.-based company, one of the
nation's largest owner and manager of malls and shopping centers
in the United States, is a commercial real estate firm that
acquires, develops and manages retail properties. Damian Zamias,
president of Zamias Services, said that he does not expect the
bankruptcy to affect the company's properties or projects. (ABI
World, May 16, 2001)


ZAMIAS SERVICES: Chapter 11 Case Summary
----------------------------------------
Debtor: Zamias Services Inc., A Pennsylvania Corporation
         300 Market Street
         Johnstown, PA 15901

Chapter 11 Petition Date: May 14, 2001

Court: Western District of Pennsylvania (Pittsburgh)

Bankruptcy Case No.: 01-25079

Judge: Bernard Markovitz

Debtor's Counsel: James R. Walsh, Esq.
                   Spence Custer Saylor Wolfe & Rose
                   400 U.S. Bank Building
                   P.O. Box 280
                   Johnstown, PA 15907
                   814-536-0735


ZANY BRAINY: Wells Fargo Extends $115 Million DIP Financing
-----------------------------------------------------------
Wells Fargo Retail Finance announced it will provide a $115
million debtor-in-possession (DIP) line of credit to Zany
Brainy, Inc., a leading specialty retailer of non-violent,
gender-neutral toys, games, books and multi-media products for
kids. The King of Prussia, Pa.- based retailer filed for Chapter
11 protection in Wilmington, Delaware.

"With a strong base of core profitable stores, Zany Brainy is
well positioned to restructure its operations and its finances
and emerge as a stronger company," said Wells Fargo Retail
Finance Senior Managing Director and Co-COO Andrew H. Moser.
"The management team is focused on the areas of the business
that need to be restructured in order to position the Company
for the long-term, and we stand behind them in this effort."

"In addition to providing the necessary financing to address our
liquidity issues, we selected Wells Fargo Retail Finance for our
DIP facility for their experience in retail restructuring," said
Tom Vellios, President and CEO of Zany Brainy. "With our DIP in
place, we have immediate access to the necessary funding to move
forward in executing our business plan. We look forward to
working closely with Wells as we work to restructure our
business and position the Company for the future."

                   Wells Fargo Retail Finance

Based in Boston with additional offices located in Philadelphia
and Los Angeles, Wells Fargo Retail Finance brings more than 25
years of experience in providing working capital to retailers,
and more than 150 years of collective experience as retail
operators. Today, the company has nearly $1.8 billion in loan
commitments to retailers throughout North America.

Wells Fargo & Company is a diversified financial services
company with $280 billion in assets, providing banking,
insurance, investments, mortgage and consumer finance from more
than 5,700 stores and the Internet (www.wellsfargo.com) across
North America and elsewhere internationally.


                         Zany Brainy, Inc.

Zany Brainy, Inc., is a leading specialty retailer of high
quality toys, games, books and multimedia products for kids. The
Company combines a distinctive merchandise offering with
superior customer service and in-store events to create an
interactive, kid-friendly and exciting shopping experience for
children and adults. The Company presently operates 187 stores
in 34 states.


BOOK REVIEW: The Wreck of the Penn Central
------------------------------------------
Authors:     Joseph R. Daughen and Peter Binzen
Publisher:   Beard Books
Softcover:   365 Pages
List Price:  $34.95
Review by:   Regina Engel

On June 21, 1970, the Penn Central Transportation Company filed
for bankruptcy reorganization under Section 77 of the Bankruptcy
Act, a mere 872 days after the largest railroad in the United
States history was formed with the merger of the Pennsylvania
and New York Central Railroads. While the memories of the major
players were still very fresh, the authors set out to examine
the causes of the stunning collapse. Their exhaustive and in-
depth analysis was originally published in 1971, but as the
authors recognized, "[t]he dimension of the disaster that befell
the Penn Central Transportation Company, its 100,00 creditors,
its 118,000 stockholders, and the hundreds of lesser companies
tied economically to the railroad will provide food for thought
for students of business history for years to come."

The largest merger of the nation's history came about following
more than ten years of discussions, but one of the points the
authors make is that because it was so uncertain that the merger
would in fact take place, very little was done during those
years to actually work out the details of merging the two very
differently operated companies.

The authors offer fascinating accounts of the personalities and
backgrounds of the people involved. Chapter 2 gives a brief
overview of the history of the railroad as a necessary backdrop
to understanding the conditions in the industry at the time of
the merger. Succeeding chapters focus on the three principals,
Alfred E. Perlman of the New York central who became president
of the Penn Central, Stuart T. Saunders, who had led the
Pennsylvania Railroad for the previous five years and was named
chief executive officer and chairman of the board for the merged
company, and David C. Bevan, the Penn Central's chief finance
officer. Detailing the differences in style and social position,
the authors contend that the failure of these men "to work as a
team and to inspire their subordinates to do so hastened Penn
Central's collapse." In addition to the people problem, the
authors devote chapters to the opposition of the future
Pennsylvania Governor Milton J. Shapp, and David Bevan's forays
into questionable outside investments, including an airline
business, which the authors maintain diverted badly needed
attention away from the problems of the railroad. Similarly, the
authors question whether the attempt to deal with the railroad
had considerable real estate holdings, hurt more than help by
taking time and attention away from the railroad's problems.

The concluding chapters contain discussions of numerous other
problems that precipitated the collapse, from the continuing
decline in the railroad industry, in part because of competition
from other means of transportation, to the bad winter of 1970,
the poor condition of equipment, labor problems, government
regulation, and, in the end, the failure of the government to
provide loan guarantees. In the final chapter, the authors quote
extensively from Perlman's and Saunders' assessment of what went
wrong. Despite their differences and attempts to lay blame, they
both conclude that without government support, the problems of a
very sick industry were too much for any management team to
overcome.

                            *********

Bond pricing, appearing in each Monday's edition of the TCR, is
provided by DLS Capital Partners in Dallas, Texas.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

For copies of court documents filed in the District of
Delaware, please contact Vito at Parcels, Inc., at 302-658-
9911. For bankruptcy documents filed in cases pending outside
the District of Delaware, contact Ken Troubh at Nationwide
Research & Consulting at 207/791-2852.


                           *********


S U B S C R I P T I O N   I N F O R M A T I O N

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Chapman, Editors.

Copyright 2001.  All rights reserved.  ISSN: 1520-9474.

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